The PJ Tatler

Romney's 5-Point Housing Plan

This isn’t very new from the Romney campaign — a 5-point plan to revitalize the housing industry. But in states like Nevada and Florida where the housing crisis is still a big problem, at least he has some hope to offer struggling homeowners.

He is correct in telling an audience in Nevada that the economy will not fully recover unless we can speed up the recovery in the real estate sector.

Las Vegas Review-Journal:

Romney said he would reform Fannie Mae and Freddie Mac to protect taxpayers from more risk and to provide a long-term, sustainable future for housing finance.

He also said he wanted the government to sell the more than 200,000 vacant, foreclosed homes it owns in neighborhoods where values have dropped as houses have emptied and fallen into disrepair.

“I’ll make sure we have them sold so we’ll have those homes occupied,” Romney said.

The other three measures laid out in his new housing plan would:

■ Make it easier for homeowners facing foreclosure to conduct short sales, deed-in-lieu-of-foreclosure and other options. No details were provided.

■ Replace the Dodd-Frank Act with “sensible regulation” that could make it easier for banks to approve mortgage loans to families with good credit.

■ Improve the job market, which Romney called “the best way to help the housing market” by getting people back to work and raising incomes.

Romney said the Dodd-Frank law, which drew boos from the audience, makes it harder for people to get home loans because it requires banks to give out only “qualified” mortgages or face penalties. But he said the “qualified” term isn’t defined, making banks stingy and unwilling to give out new loans.

“Bankers don’t know if they’re going to get in trouble,” Romney said. “I will get credit flowing to people who are qualified so we can start moving more homes and raise values.”

The Dodd-Frank FinReg bill is a disaster. Not only does it create a new consumer watchdog in the Consumer Financial Protection Bureau that puts financial services employees in a strait jacket as far as the kinds of products they can offer customers, it discourages lending to those on the margins because if a customer loses money, they can complain to the CFPB that they didn’t understand the risk and initiate an investigation. The bill has a deadening effect on the financial industry and replacing it with common sense regulations designed to facilitate home loans while still giving the consumer protection against charlatans is needed.

His proposal that would allow quicker sales of homes that are in distress is also a good one. It will be interesting to see the details, but a more rapid turnover of these properties will be good for the market and for the homeowner.

Reform of Fannie Mae and Freddie Mac is long overdue, as is the sale of foreclosed properties owned by the government. An improved job market would follow a strongly recovering housing market, as the two complement each other in the economy.

The devil is in the details, of course, and even repealing Dodd-Frank will not be easy if the Democrats maintain control of the Senate. But the Obama administration has piled thousands of new regulations on the finance industry which has done nothing to spur lending, and everything to slow down this vital sector. Romney’s proposals, though not fleshed out, promise to begin addressing some of the problems in the real estate industry and clean up some of the mess made by President Obama and the Democrats.