By Marc Dann
Those of us on the front lines of protecting the constitutional and contractual rights of homeowners spend a lot of time lamenting the failed policies of the Obama administration. Even Obama himself, on Sunday’s 60 Minutes interview acknowledged that his efforts to address the foreclosure crisis have fallen short of his own expectations.
Lets recap a few of the highlights of Obama’s failed policies:
- No meaningful civil or criminal enforcement efforts against Wall Street Banks for the obvious criminal fraud in the origination and securitization of millions of mortgages from 2001-2008 or the compounded felonies of document and testimonial fraud in the foreclosure process attempting to conceal their securitization failure.
- No meaningful effort to systematically make principal reduction modifications available despite overwhelming economic evidence that the net present value of loans with rationalized loan to value ratios increases making such modifications a win/win for lenders and homeowners.
- The administrations insistence including in the much heralded Department of Justice/Attorney General’s settlement that those servicing loans be allowed to police themselves despite a track record of incompetence and fraud, allowing no private right of action for homeowners to hold loan servicers accountable for being honest and dealing in good faith.
- HUD the FHA and the VA continue to restrict reasonable and meaningful settlements related to loans that they insure forcing hundreds of thousands of homes to foreclosure that could have been saved had their mortgages not been insured by federal programs. Servicers cannot collect on FHA and VA guarantees unless the foreclosure is completed insuring larger losses and an expensive subsidy to banks and servicers. Private mortgage insurers have figured out that they can mitigate their losses by participating in real modifications.
So in my mind, it was almost impossible for Mitt Romney to develop a policy platform for housing that is even worse.
But that is exactly what he did.
His policy simply ignores the issues of Criminal or Civil enforcement actions against Servicers and Foreclosure Mills who continue to commit fraud on a daily basis.
There is not a word about Principal Reduction Modifications or about any actual effort to keep homeowners in their homes.
Romney offers vague criticism of Fannie Mae and Freddie Mac but provides no proposal to modernize and rationalize their fraudulent and self-defeating business practices.
He offers platitudes about engaging the private sector but offers not a word about solidifying a homeowner’s private right of action to enforce the terms of the DOJ settlement or to hold cheating servicers and foreclosure mill law firms accountable.
He does say that improving the job market will take pressure off the foreclosure crisis. (I don’t think I would have thought of that if he hadn’t written it).
Slate calls Romney’s housing policy “lame”. I think that is far too generous.
A meaningful plan to rationalize the housing market by bringing home debt in line with housing values would motivate an army potential voters.
My experience in politics tells me that millions of homeowners, who were convinced or at least encouraged by the government and its programs to put the vast majority of their net worth into their homes, and who now, at best, find themselves treading water in the current housing market can provide a potent audience for a bold leader. A leader who is willing to advocate for programs to help them, even if Wall Street Banks make a few dollars less on each transaction.
Sadly, no one running for President has decided to be that leader.