As the news coverage continues to fill with presidential candidates stance for the upcoming election, one key factor should be what each candidate plans to do about the housing market.
Movoto Real Estate attempts to demystify how Republican candidate, Mitt Romney, and President, Barack Obama, will address the housing crisis.
Team Romney Says: Leave It Be
The Romney camp focuses its strategy on reducing government involvement in the housing market saying, “Don’t try to stop the foreclosure process, let it run its course and hit the bottom.” The idea is that the market will drop, but rebound to a stable equilibrium.
Romney’s other half, GOP running mate Paul Ryan, has voiced support for the privatization of Fannie May and Freddie Mac, a move inline with the GOP vision to:
- cut federal aid,
- downsize government programs,
- and let the free market sort things out.
Team Obama Says: Our Efforts Are Better Than Doing Nothing
When Obama took office in 2008, there were $7 million households at risk of foreclosure. The planned cure was a $75 billion plan, which included the formation of the Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP). Both programs have fallen short of their goals.
A revamped housing plan was announced by the Obama administration in February, which will:
- enable more borrowers to refinance, reduce their monthly payments, or pay off their loans sooner to rebuild equity lost in the housing crash,
- standardize the loan application and borrowing process
- cost $5 to $10 billion in loan reserves to cover the FHA’s risk,
- need to gain Congressional approval.
For the next few months, the presidential candidates will fight for American voters. Let’s hope the housing market will take center stage in upcoming debates from each side.
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