Don’t try and stop the foreclosure process. Let it run its course and hit the bottom, allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up. The Obama administration has slow-walked the foreclosure processes that have long existed and as a result we still have a foreclosure overhang.
Trying to stop the foreclosure process is sort of what I do—and I’ve got some serious concerns about Romney’s statement. It’s not just that this is sort of a jerk thing to say. None of us thought Romney cared a whole lot about the very poor. The surprising part is Romney’s lack of knowledge, lack of interest, and lack of sound priorities.
I’ll give Romney some credit for knowing that the foreclosure processes “have long existed.” But that’s it. The Obama administration wasn’t slow-walking the process—it was just asking that it be followed. As it turns out, the mortgage servicers were skipping some of the important steps “that have long existed.” Like the step where you make sure you own the home you were foreclosing on. All fifty state attorney generals investigated this, as did the department of justice. A settlement was reached between with the five biggest servicers and forty-nine of the states. The lenders agreed to pay $25 billion dollars for their bad behavior. That’s billion. As in, “The annual GDP of Vermont is about $26.4 Billion.” This is just one of many settlements connected with this. So when Romney is saying, “Let the process take its course,” he’s essentially saying, “Don’t go after the big banks for breaking the law. That’s bad for the bank’s stockholders. Instead, let them steal people’s houses.” So that’s not cool.
Then there’s the “Let it run its course and hit the bottom” bit. I understand that sometimes it’s best to get something painful over with. Rip off the bandaid. But this assumes the stakes are relatively low. If ripping off the bandaid would take your face with it, maybe you don’t want to do that. Allowing preventable foreclosure has consequences. People live in the houses Romney wants to see foreclosed. They will be homeless. But that’s just the beginning of the problem. It means fragile communities lose members. It means properties are left vacant, even as homelessness increases. It means increased crime due to unsecured, vacant buildings. It means neighbors lose home values and cities lose tax revenue. It means the kids who were living in the homes have to move to new school districts and leave their friends. The human cost is far higher than the cost to Romney’s investment portfolio.
And how do we feel about investors buying homes, putting renters in them, and fixing them up? First, “fixing them up?” Yeah, right. It doesn’t happen. Maybe if a guy buys a house. But the large scale investors aren’t doing expensive repairs. That’s a loser’s game. In practice, these “investors” are most likely to be crappy, absentee landlords. Second, Romney’s voiced a preference for renting homes rather than owning them. This is both far more expensive for the renters and means that any future appreciation in the home values goes to the investor. It’s a massive shift in anticipated wealth from the middle class to the rich.
Finally, Romney’s plan is a fiscal disaster for the U.S.. Many of those loans being foreclosed are, in one capacity or another, owned or guaranteed by the U.S. government. Romney’s plan is essentially buy-high sell-low for tax payers and buy-low sell-high for his investors. He wants to see the housing market crash to the bottom, unload a bunch of U.S. assets there, and then let private individuals ride the market back up.
Also, he thinks you should make him President.