From Homescape

About a month ago I wrote a blog raising my concerns about the presidential candidates’ (both Democrats and Republicans) lackluster address of the housing crisis. I said the failing health of the economy and the housing crisis will be the largest domestic problems facing our next elected president. When the candidates launched their campaigns last fall, voters were presented with very thorough plans on complex issues such as the Iraq war and universal health care, but there was minimal discussion on how the candidates plan to jump-start the economy and correct the housing crisis if elected president. But no sooner did I post the blog, did the political rhetoric change course. In January, election polls showed that the economy ranked at the top of most voters’ concerns, pressuring Democratic Sens. Hillary Clinton and Barack Obama and the Republicans, Sen. John McCain and Mitt Romney, to start addressing the issue more seriously.

Super Tuesday is finally here and today voters in 24 states across the country will decide the fate of the Democratic and Republican nominees for president. With mounting housing market anxiety and a recession slowly manifesting, here is what the top four presidential front-runners are proposing on the campaign trail, according to Bloomberg.com:                                       

Romney, a co-founder of the Boston-based venture-capital firm Bain Capital LLC, proposes lowering down payments for federally backed loans, raising the ceiling on those loans and expanding counseling to avoid foreclosures.

McCain, the Republican front-runner, said in a debate last week that some “greedy people in Wall Street” may “need to be punished” and advocated one-page mortgages and tougher lending standards. But he hasn’t outlined a plan for forestalling foreclosures.

Republicans, for the most part, support President Bush’s approach on the subprime crisis, which involves getting lenders and mortgage-bond investors to agree voluntarily to modify some troubled loans.

Clinton wants to freeze subprime interest rates for five years to allow refinancing, funnel $1 billion to programs to help avoid foreclosure and impose rules to prevent fraud.

Obama proposes monitoring and fining lenders who commit mortgage fraud and creating a $10 billion fund to help “innocent victims” refinance or waive taxes and costs associated with a home sale.

Both Clinton and Obama have proposed a detailed stimulus package to deal with the nation’s short-term economic struggles and a series of larger measures meant to spur long-term growth. But Clinton argues her approach is better than Obama’s for several reasons, especially because it includes a plan to tackle the mortgage crisis. She points out that none of her opponents are offering in-depth solutions to that problem.

In a recent interview with The Buffalo News, Clinton said: “I think if we fail to take on this mortgage crisis and do more than Bush has agreed to do, we’re not going to get the impact from the stimulus that everybody’s hoping for.”             

While Obama’s proposed multibillion-dollar fund deals with the mortgage crisis, Clinton’s plan includes a 90-day moratorium on foreclosures and a five-year freeze in interest rates for subprime loans. Obama has criticized the Clinton proposal, saying that freezing subprime loan rates would inevitably mean higher mortgage rates for everyone else. But Clinton disputed that notion, saying higher mortgage rates are unlikely when the Federal Reserve is working to push interest rates lower. She said an increased federal involvement in housing, including raising the loan limit for Federal Housing Administration mortgages, also would help keep mortgage rates down. However, some economists argue that mortgages are more sensitive to changes in the overall economy than to the Federal Reserve’s rate tweaks.

Regardless of your political allegiance, we can all agree that the next elected president faces a tough road ahead. There’s still another 10 months left until the big day, and it’s important to understand where the candidates stand on key issues affecting our economy.