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BRIDGE BRIEFING: Romney And Housing

Romney Does Not Support Helping Homeowners In Need

Romney Wanted Foreclosures To Hit The Bottom

Romney Believed The “Cure For Foreclosures” Was Getting Government Out Of The Way And Letting The Process Run Its Course. According to a New York Times editorial, “Since the housing bubble began to burst six years ago, prices nationwide have fallen by a third… As home prices fall and more homeowners sink underwater, there will be more foreclosures and more price declines. So what is Mitt Romney’s response? Bring it on. In interviews and in the Republican presidential debates, Mr. Romney has said that the cure for foreclosures is for the government to get out of the way and let the process run its course… The argument might have some red-meat appeal, playing off the notion that any owners who lose their homes are getting what they deserve. It is wrong on several counts…Mass foreclosures are a rotten way to stabilize the market…Who does Mr. Romney think will buy up millions of foreclosed properties? Borrowers who lose their homes to foreclosure or who sell their homes for less than the balance on their mortgages can be denied credit for years; many will never be homeowners again… With the economy still weak and vulnerable to shocks, more foreclosures and the resulting price declines would only weaken the economy further…The let-it-crash argument conveniently ignores that the housing bubble was the result not only of overborrowing but of reckless lending too.” [New York Times, Editorial, 11/26/11]

Romney Opposed Trying To Stop The Foreclosure Process, Wanting It To “Run Its Course And Hit The Bottom.” According to The Huffington Post, “Republican presidential frontrunner Mitt Romney suggested he doesn’t support foreclosure relief for the millions of Americans struggling with underwater mortgages, untold numbers of which have been the victims of fraudulent lending or foreclosure practices. In a filmed interview with the editorial board of the Las Vegas Review-Journal, a newspaper serving the hardest-hit foreclosure state in the union, Romney criticized President Barack Obama for not foreclosing on American families fast enough. ‘Don’t try to stop the foreclosure process. Let it run its course and hit the bottom,’ Romney said when asked what he would do to jump-start the floundering housing market. ‘Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up,’ he continued. ‘The Obama administration has slow walked the foreclosure process … that has long existed and as a result we still have a foreclosure overhang.’” [The Huffington Post, 10/18/11]

Romney Opposed Housing Relief Programs, Saying The Market Must Repair Itself By Collapsing. According to KLAS-TV 8 News Now, “Romney says he doesn’t support President Obama’s relief programs HAMP and HARP. Instead, he believes the housing market must bottom out to repair itself. ‘If you start having government starting to tax people so they can give money to people who need help in their homes, you’ll just bring the market down, down, and down, and you’ll never see an end to it.’” [KLAS-TV 8 News Now, 2/2/12]

Romney Cut Housing And Rental Assistance For Families In Need

Families Faced Homelessness After Romney Cut $2 Million From The Residential Assistance Program Preventing Homelessness. According to the Telegram & Gazette, “Grace Carmark, executive director of the Central Massachusetts Housing Alliance, said hundreds of families facing homelessness will be hurt by the cuts. The governor vetoed $2 million out of $5 million for the residential assistance to families in transition program, that gives families facing homelessness for inability to pay rent or make a mortgage a one-time grant of up to $3,000. She said once homeless, a family costs the state about $3,000 per month and the average shelter stay is six months. ‘The veto has frozen the RAFT program completely, so without this funding there are people who will be at risk for becoming homeless,’ she said. Moreover she said area homeless shelters, ‘are completely full’ and in the Worcester area agencies may soon have to go back to putting up families in hotels and motels. That is in part because another $3.1 million cut in the state renter voucher program would eliminate about 400 vouchers, which Ms. Carmark said, ‘would have been available to move people out of shelters.’” [Telegram & Gazette, 11/21/06]

Romney Vetoed $8.8 Million For Housing From The State Budget Including $3.2 Million For Rental Assistance. According to the Massachusetts Budget and Policy Center, “The Governor vetoed $8.8 million from the Conference budget for housing. Among vetoes were reductions in funding for the Massachusetts Rental Voucher Program (a $3.2 reduction), Rental Assistance for Families in Transition (a $2.0 million reduction), and the Homeownership Opportunity Affordable Housing Program (a $1.5 million reduction). The Legislature subsequently overrode these and other vetoes to the budget for housing.” [Massachusetts Budget And Policy Center, 12/13/06]

Romney Proposed Cutting Funding For Rental Assistance By 40 Percent For Families Facing Homelessness. According to the Massachusetts Budget and Policy Center, “This budget would also lower the amount appropriated to Rental Assistance for Families in Transition (RAFT). Funding for this program, which provides assistance to families at risk of homelessness, would fall from $5.0 million to $3.0 million. The Governor indicates that $2.0 million that had been used for RAFT would be transferred to other budget accounts, including $1.0 million to support the Tenancy Preservation Program.” [Massachusetts Budget And Policy Center, 2/1/06]

Romney Eliminated Funds For Homeless Assistance And Homeless Prevention. According to the Bay State Banner, “As winter draws near, the cuts to services for Boston’s homeless population, which last year saw an increase of 9 percent, loom large. Romney eliminated $410,000 in homeless assistance funds, an amount that Menino says would pay for 155 overflow/winter beds in Boston for roughly five months. Another $2 million was cut from homelessness prevention programs, which the mayor says assures 500 more families in Boston alone – and twice that amount statewide – will not receive a rental housing subsidy, which helps people stay in their home…” [Bay State Banner, 11/16/06]

Romney Was Not Concerned About Homeownership

Romney Did Not Think Homeownership Was “The Be-All And End-All Of The American Dream.”  While speaking at the Washington Examiner Editorial Board, Mitt Romney said, “I don’t think homeownership is the be-all and end-all of the American dream. I think it’s a wonderful thing to own a home. But in some cases, particularly for people who may be moving frequently, or people who are unable to gather a down-payment, that renting may be a better economic choice for them.”  [The Washington Examiner Editorial Board, 12/7/11]

Romney Would Eliminate The Dept. Of Housing And Urban Development

Romney Said Aspects Of The Department Of Housing And Urban Development Could Be Better Run By States. According to the National Review, in an interview with Jim Geraghty of the National Review Online, Romney said “The role of the Department of Housing and Urban Development has traditionally been to help people with housing vouchers to be able to afford housing, even though they’re poor or out of work. [The question] in my mind is whether that would not be better administered at the state level, with a block grant being provided from the federal government. I think there are some aspects of the Department of Housing and Urban Development which could be better run at the state level, with less fraud and abuse.” [National Review, 4/19/12]

Romney Said The Department Of Housing And Urban Development “Might Not Be Around Later.” According to the Wall Street Journal, “On Sunday, Mr. Romney said he would look to the education department and HUD for potential cuts. ‘That might not be around later,’ Mr. Romney said of HUD. Mr. Romney said he would either consolidate the education department with another agency or make it ‘a heck of a lot smaller.’ ‘I’m not going to get rid of it entirely,’ he said.” [The Wall Street Journal, 4/15/12]

Before The Housing Crash, Romney Supported Expanding Home Loans Through Freddie And Fannie, And Some Of His Advisors Were Lobbyists For The Financial Institutions

Romney Supported Expanding Home Loans Through Fannie And Freddie

Romney Wanted To Lift The Lending Cap On FHA To Allow Freddie Mac And Fannie Mae To Take On Bigger Loans To Get People Into New Homes. According to the Lowell Sun, “Goodman said he would be wary of a proposal that calls for freezing interest rates, or enacting other measures that he says inadvertently reward mortgage lenders for bad behavior. He agreed with Romney, and the position of other candidates, that the government should lift the lending cap on the Federal Housing Administration to allow Freddie Mac and Fannie Mae to take on bigger loans to get people into new homes. ‘Make it easier for people who have good credit but don’t qualify because they are borrowing more money than a local bank is willing to take the risk on,’ Goodman said.” [Lowell Sun, 1/30/08] 

CNN: Romney Was Featured As A “Distinguished Panelist” At A 2004 Fannie Mae Conference. According to CNN, Romney agreed “to be a distinguished panelist at a housing conference sponsored by the Fannie Mae Foundation in 2004. That was before the mortgage slump began, and Fannie and Freddie did not begin dabbling aggressively in risky home loans until 2005 and 2006. But Romney’s appearance came right as the subprime lending boom was taking off. According to a brochure released by the Fannie Mae Foundation recapping the event, Romney, then the governor of Massachusetts spoke alongside former Pennsylvania Gov. Ed Rendell and offered ‘a gubernatorial perspective’ on homeownership. Romney, the brochure summarized, outlined his economic development goals in Massachusetts and talked about the need to expand access to affordable housing. Romney was not paid for the appearance.” [CNN Political Ticker, 1/25/12]

Romney Advisors And Fundraisers Lobbied For Freddie And Fannie

Former Reps. Susan Molinari and Vin Weber Were Top Advisers To Romney’s Campaign And Lobbied for Freddie Mac. According to the Daily Caller, “…Former Rep. Susan Molinari — a top Romney surrogate and adviser (watch her attacking Gingrich in this video) — was one of the former GOP lawmakers paid quite handsomely to help stop ‘any meaningful regulation in the years before the housing mortgage giant crashed …’ She’s not alone. One of Romney’s top economic policy advisers, Vin Weber (whom Politico described as a ‘former Minnesota congressman and certified member of the D.C. power elite’), spent years lobbying for the group. According to the AP, in 2006 alone, Webber’s lobbying firm (Clark and Weinstock) was paid $360,297 by Freddie. And according to the AP, Weber made no bones about his close ties to the failed mortgage giant: ‘I personally met with the CEO several times and with Hollis and his team regularly,’ Weber said in the e-mail. ‘Clark and Weinstock worked effectively and intensely for Freddie Mac under Dick Syron [Freddie Mac’s then-chairman and chief executive] and [Senior Vice President] Hollis McLoughlin.’” [Daily Caller, 1/25/12]

2008: Romney Believed Fannie Mae And Freddie Mac Were In “Stable Hands” And That Financial Institutions Would Not Be In Trouble. In an interview with Glenn Beck, Romney was asked, “I heard a former Fed chair say this morning that he thinks…it’s going take us about two years to dig our way out but this is the last shoe to drop. Do you buy that at all?” Romney replied, “It’s possible. You know, the strange thing about recessions is that as Alan Greenspan has pointed out, they are oftentimes caused by a healthy dose of irrational behavior and you never know what irrational behavior’s going to do. It’s hard to predict. But, you know, I think with Fannie Mae and Freddie Mac now in stable hands and with this AIG picture behind us, there’s a real good shot that we won’t see major financial institutions like this in trouble.” [Glenn Beck Interview, 9/17/08]

2008: Romney Said 100 Banks Go Under A Year In The U.S. In an interview with Glenn Beck, Romney said, “But, of course, we’re going to have banks go under. We usually have about 100 banks a year that go under in this country. We’ll have at least that many this year and there will be plenty for the media to write about that will be scary but, you know, we can hope that and I think we have a good prospect of believing that the worst is behind us in terms of these financial institution bankruptcies.” [Glenn Beck Interview, 9/17/08]

1971: HUD Secretary George Romney Approved Of Fannie Mae’s Program  Purchasing Mortgage On A Trial Basis. In the AEI book “Serving Two Masters Yet Out Of Control,” Peter Wallison wrote, “In 1971 Secretary George Romney gave Fannie Mae approval for a limited program of purchasing conventional first mortgages on a trial or demonstration basis. Fannie Mae has since argued that the letter permanently authorized it to purchase any kind of conventional first mortgage. The GSE has claimed that the Romney letter also applied to conventional mortgage instruments that were of minimal importance in the mortgage market in 1971, such as balloon mortgages, or even undreamed of at the time, regardless of the financial risks that the alternative instruments might pose.” [“Serving Two Masters Yet Out Of Control: Fannie Mae and Freddie Mac,” 2001, Pg. 132]