This is not a political endorsement – I hope all the politicians jump on board! From HW:
Republican Presidential candidate Mitt Romney says the government should let the foreclosure process run its course, so the housing market can reach its bottom.
Romney made those statements in an interview recorded by the Las Vegas Review Journal this week.
The state of Nevada — Las Vegas in particular — has been hit hard by the foreclosure crisis. When asked how he’d fix housing, Romney told the Las Vegas paper, he would let the foreclosure process go forward to clean up the process.
“Let it run its course and hit the bottom,” he said. “Allow investors to buy homes, put renters in them, fix them up and turn them around.”
Romney took shots at the Obama administration, saying the president “has slow walked the foreclosure processes that have long existed and, as a result, we still have a foreclosure overhang.”
Romney also pushed back at the credit given to first-time homebuyers in the wake of the housing meltdown, calling it “insufficient and inadequate to turn around the housing market.” “It was like cash-for-clunkers,” he said. “Throwing money at something which is not market-oriented.”
Romney did say the idea of helping certain homeowners refinance their mortgages is worth further consideration. But he added, “I am not signing on until I find out who is going to pay and who is going to get bailed out.”
Fellow presidential candidate Ron Paul also announced a fiscal plan that included a housing reference this week. The congressman said he would end funding for the Department of Housing and Urban Development as part of an aggressive plan to tackle the nation’s deficit.
Occupy Rancho Santa Fe:
http://www.10news.com/video/29524350/index.html
Well it took too long but we’re finally seeing people in government realize there’s nothing they can do to fix the problem other than letting it run the course. All they could really do was take money from one group of people and give it to another group of people. In this case it was take money from the responsible and give it too the irresponsible (the naive bubble buyers) and the crooks (the bankers).
When will we get to the day when homes are no longer viewed as a retirement investment. As Karl Denninger said, “We all want cheap cell phones, cheap DVD players and cheap televisions. Why would you not want cheap houses as well?”
I’m glad Mitt is halfway there. Now we need Cain to take it to the next step. Don’t just let the foreclosure process run its course, but make the banks and servicers foreclose.
Thanks, Jim, for posting that about Romney. I hope you don’t mind I share my skepticism. Banks filling campaign coffers. Republicans raised $83 million. All of the major financial players — Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America — Mitt Romney is their number one beneficiary this year across the board.
I don’t mind.
This isn’t a political blog, but let’s face it – politics is in the way of a healthy real estate market.
Did the banks know Romney’s position when they sent the dough? Or did they send the dough because they agree? It would be awesome if everyone comes to the same conclusion, at the same time!
I expect that one way or the other the banks will hedge their bets by funding politicians on both sides.
Color me unimpressed. I think his “investors” is code for dumping the properties en masse to institutional investors, cutting out individual investors from the process.
You covered that idea yesterday.
I’d much rather see a RTC style clearing house, where the properties are available for individual purchases.
Certainly a resolution of housing dysfunction will be helpful in the long run. But how we get there is important. Do you all agree with this statement by a high ranking Republican? “[L]iquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”
If that sounds good to you, great, you’ve endorsed the econonic plan of Andrew Mellon, Secretary of Treasury to Herbert Hoover, who’s hand’s off approach essentially permitted the depression.
who’s hand’s off approach essentially permitted the depression.
Permitted?!? Some things are unavoidable, and resisting the inevitable (as the current DC crowd has) is futile.
“If that sounds good to you, great, you’ve endorsed the economic plan of Andrew Mellon, Secretary of Treasury to Herbert Hoover, who’s hand’s off approach essentially permitted the depression.”
This assumes the depression was in fact avoidable. I would argue that based on the debt that was in the system at that time it wasn’t. There comes a point where taking on more debt to solve a debt problem ceases to work. We’ve been doing it for the past 20-30 years. We’re at that point again, yet the money masters keep insisting that we borrow more and more from the future so we don’t have to deal with the pain now. It just makes the pain worse down the road when we finally accept it or it’s forced on us.
Mellon/Hoover understood the mathematics involved and decided to face the music while they still had some control. In today’s politics it looks like we’re just going to hit the wall and let the market have control.
“You can ignore reality, but you cannot ignore the consequences of ignoring reality.”
I would disagree that the effects of the business cycle’s highest highes and lowest lows can’t be smoothed somewhat. I’m an unapologetic Keynesian. If we had increased taxes during boom times and ran a surplus (oh wait, we did under Clinton and then Bush gave it all back in 2001), then we might not be in the fiscal mess. Now is the time for government spending to be paid for when the economy recovers.
By the way, there’s a reason why houses in foreclosure go for less: title isn’t always clean. The Massachussetts Supreme Court ruled today that a guy who bought a house from the trustee after an improper foreclosure didn’t have title to the house (which he has subsequently subdivided into condos, which he sold, btw). That is a giant mess.
History suggests that perhaps the best course of action for dealing with recession/depression is leaving the market to sort it out. One of the shortest depressions we’ve ever experienced is the 1920-1921 depression in which the government didn’t intervene. I’m of the Austrian camp because politics will never allow politicians to actually follow the Keynesian rules of surplus during the good times. Maybe Keynesian can work in a utopia, but not in a world of greed, fraud, and competitiveness.
http://en.wikipedia.org/wiki/Depression_of_1920%E2%80%9321
A fair critique, but Clinton did it. It can be done if there is enought will. The problem with the Austrian approach is that it can permit a massive contraction like 1929, with horrible consequences to the society writ large. Anyone who thinks the U.S. economy would be functioning at all if all all the ibanks had collapsed is fooling themselves.
In my opinion, President Clinton’s policies didn’t create a US surplus any more than Governor Pete Wilson’s policies created a California surplus. There was a stock market (dot com) bubble that artificially increased tax receipts across the board starting in the mid 1990’s.
Romney just talked out of both sides of his mouth!
“When asked how he’d fix housing, Romney told the Las Vegas paper, he would let the foreclosure process go forward to clean up the process. ‘Let it run its course and hit the bottom,’ he said.”
(Don’t interfere with the foreclosure process)
“Romney did say the idea of helping certain homeowners refinance their mortgages is worth further consideration.”
(Let’s interfere with the foreclosure process)
Brings to mind the expression about having and eating cake…
Not to mention that Rubin dramatically shortened the average term of outstanding debt, thus significantly cutting interest costs.
Dudley,
Refinancing underwater borrowers who nevertheless feel compelled to make their contracted payments don’t have much to do with delaying foreclosures. He’s not really talking out both sides of his mouth, or you don’t really understand the current situation.
I’m not giving an endorsement either, but banks could get on board with this. After all, all we have done for 5 years is delay the process, and it doesn’t seem to have fixed the problem. They might just be willing to try the more expedient approach. Who knew? Or, as we old-timers say “hoocoodanode?”
Chuck
“In my opinion, President Clinton’s policies didn’t create a US surplus any more than Governor Pete Wilson’s policies created a California surplus. There was a stock market (dot com) bubble that artificially increased tax receipts across the board starting in the mid 1990?s.”
There’s been a bubble, or at least a balloon, of some sort in every decade since WWII. As long as you don’t spend even more than you take in, fail to take the increased revenue in or even worse give some of it back (all of which we did during the last decade), the resulting surplus is perfectly valid and the person whose policies are responsible for not making those blunders can legitimately claim the credit.
“Refinancing underwater borrowers who nevertheless feel compelled to make their contracted payments don’t have much to do with delaying foreclosures.”
If we’ve learned anything from the housing bust and its underwater mortgages, it’s that making payments on a mortgage is more about the character of the borrower than the value of the collateral. People who are faithfully making payments on underwater 7% mortgages aren’t going to suddenly become higher risks if you let them refi down to 4%.
Wow – I am impressed! JTR actually mentioned the one candidate who believes in a free market, limited government, has a consistent voting record and has presented a plan to cut 1 Trillion dollars in federal spending his first year in office and balance the budget in 3 years.
In my estimation Ron Paul is the only hope for (and I hate to sound so cliche) “change” and isn’t beholden to corporate America. Oh, but wait, this wasn’t a political post! 🙂
Hopefully Jim will indulge me here, but at least Buddy Roemer has not accepted money from any banks. Probably a long shot.