Federal Housing Finance Agency (FHFA) head Edward DeMarco nixed a suggestion by the White House to allow a round of principal write-downs, or in other words forgiving some of the principal debt that homeowners who are in foreclosure owe.
DeMarco feels that forgiving debt for those who cannot pay their loans sends the wrong message to those who are paying their mortgages. It is a good point, but perhaps there is something that goes along with the president’s idea that could work for DeMarco as well.
An editorial in Bloomberg Businessweek magazine last week explained how both Mitt Romney and Barack Obama have not been vocal on how they would (or should) address the beleaguered housing market.
For Romney, economic growth is the answer, but he lays out no specific moves that the government should make. The president does favor debt forgiveness, but he is slow to pressure FHFA, which is something he can do. There could be a modification of both candidates’ agendas that could get some momentum into the housing market.
As I’ve noted in this column before, the states with the highest foreclosure rates are also those with high populations of returning veterans; e.g. Florida, Arizona, and California. This is only a coincidence.
California has a lot of problems and foreclosures are just part of their problem. Now would be a good time for one of the candidates in the presidential race to discuss the idea of a Housing G.I. Bill.
The G.I. Bill has done great things helping veterans get better educated. It jumpstarted both careers and the economy. The time is right to give a boost to returning veterans by giving them a housing benefit that would serve us, as well as them.
If DeMarco does not favor debt forgiveness for those who are at risk of losing their homes, maybe he could at least consider this for veterans with mortgages.
Veterans without mortgages could get lower interest rates with some help on closing costs, while those with mortgages could get some help (if they need it) with debt forgiveness.
No member of Congress is going to argue that they do not deserve this. It is the least we can do for America’s best. We celebrate the sacrifice of our veterans with days off, parades, and mattress sales. Now is a good time to actually pay them back.
Since this would be a government program, there are even ways to incentivize veterans to buy in areas where there is a need for more home ownership, like Detroit, Baltimore, upstate New York, etc.
This could be a win-win for the economy and for the veterans to which we owe so much. A Housing G.I. Bill, with attractive interest rates and some debt forgiveness sends the right message to veterans and it addresses part of this housing crisis.
DeMarco should be open to this, and both Romney and Obama should get out in front of this.
Paul Ryan and the Catholic Vote
Congressman Paul Ryan being on the Republican ticket came as a surprise to some of us political junkies who were trying to predict Mitt Romney’s choice for the November election.
Ryan is an interesting pick, although somewhat unorthodox. A member of the House of Representatives has not been on a ticket since Geraldine Ferraro. This also marks the first time that there are two Catholics in a presidential election (Ryan and Vice President Joe Biden) at the same time.
In 2008, Obama appealed to progressive Catholics with his calls for health care reform and other social mandates. But not all Catholics are socially progressive. The pro-life Catholic crowd that may not be jazzed about a second Obama term have Paul Ryan to feel good about in November.
Ryan is not another Sarah Palin, but the concern is that he may be another Jack Kemp.
Kemp was a mentor to Ryan, who are both conservatives on the tax-and-spend front. Kemp was likable, the same way Ryan is likable. Kemp energized Bob Dole’s campaign, the same way Ryan has energized Romney’s campaign. So, what is there for Republicans to worry about?
Well, Kemp was a little too invisible in the 1996 campaign after he was announced, and he was a non-issue in the vice presidential debates. Ryan, with “cheese and bratwurst running through my veins,” does not have to worry about becoming Sarah
Palin, but he has to do better than Jack Kemp.