Friday, Oct. 19, 2012 | 2 a.m.
A bipartisan handful of Nevada’s congressional hopefuls addressed a crowd of about 200 in Las Vegas on Thursday about the one issue it seems every Nevadan running for office agrees needs work in Washington: housing.
The Rally for Homeownership, sponsored by the National and Southern Nevada Home Builders Associations, featured Sen. Dean Heller, the Republican running for re-election to the Senate seat he was appointed to last year; Rep. Joe Heck, the Republican running for re-election to the 3rd Congressional District’s seat; and former Rep. Dina Titus, the Democrat running to represent the 1st Congressional District.
They shared personal anecdotes about their own experience with homeownership before making their economic case for how homeowners in Nevada should be helped.
“When my parents first got married, they rented the first-floor basement apartment from my aunt, a one bedroom. My sister and I shared the bedroom while my parents slept on a pullout couch for seven years until they were able to scrape together enough money for a down payment on our first home,” Heck said. “I remember ... the sense of pride, the sense of accomplishment that they had when we were able to buy our first home. ... That is the importance of homeownership; it is about being able to provide a stable environment in which to grow our families.”
“I remember when I bought my first home. ... I was 25 years old. To this date, it was the most important financial decision I made,” Heller said. “And I don’t care if you’re 25 or 85, buying that home for most Nevadans, most Americans, is the most important financial decision you will make. And I want everybody, I want future generations to remember the first home that they bought. That’s how critical all this is.”
“How many of you know somebody, have somebody in your family, work with somebody or even yourself have been affected by that home foreclosure crisis that we face?” Titus asked. “I know; it’s a lot of us.”
But while the organizers and featured politicians emphasized how wonderful they thought it was that housing was such a bipartisan issue for the Nevada delegation, there remain fairly significant differences between the parties and even between various representatives within each party about what should be done to correct the housing market.
Over 60 percent of the homes in Southern Nevada remain underwater, significantly more than the rest of the nation’s urban areas. Much of that is due to the fact that the Southern Nevada economy depends in large part on people from outside the area spending their disposable income on Vegas vacations, but much is also due to the fact that the federal programs in place to correct the foreclosure crisis through mortgage modifications weren’t originally available to homeowners as severely underwater as those in Nevada.
Titus defended some of those programs, most of which she voted to create while in Congress, on Thursday as being steps in the right direction.
“It’s not like its been ignored,” Titus said. “But we gotta keep pushing it. I believe that the president absolutely thinks that owning a home is a cornerstone of the American dream and part of bringing back the middle class.”
Heck also voted to continue those programs when he took over Titus’ seat in the House.
But Heller voted against them.
“We kept spending trillions of dollars here in this country on new stimulus programs, new bailout programs,” Heller said. “You could have taken all that stimulus money, all that bailout money ... you could have used that money to buy off every one of those mortgages that were underwater and we’d be better off as America today.”
Heller stressed that he wasn’t actually endorsing the idea of buying up underwater mortgages as a financial plan. And that is another difference between Heller, and most Republicans, and Democrats.
Most Democrats believe the only way to really right the Nevada housing market is to get banks and the government to help pay down the principal of an underwater loan — the practice known as “principal reduction.”
Titus referenced this, in the context of a recent $25 billion Bank of America settlement from last spring that included almost $17 billion in principal reductions, as the natural next step in combatting the housing crisis from Washington. According to various reports this week, almost $5 billion of that principal reduction money has been doled out.
“The settlement ... may need some legislation to make that work,” Titus said.
Most Republicans, however, don’t support the idea of government helping pay down, or forcing banks to help to pay down, the principal of a loan.
Heck told the Sun in an interview last week that he really didn’t think the size of debt was the chief problem of most underwater homeowners.
“If the goal is to be able to get a homeowner to be able to afford to stay in their home, the quickest and easiest way is through refinancing,” Heck said. “It’s about the monthly payment and them being able to stay in their homes, not about what the total amount of the loan is.”
Heller said he would be “open to the idea of [principal reduction] occurring” but argued with a reporter who suggested that principal reduction seemed like “the only solution” to clearing the Nevada housing market of bad equity.
“We have other solutions,” Heller said Thursday, touting the Keeping Families in Their Home Act, a bill he introduced that would allow homeowners facing foreclosure to enter a rent-to-own agreement with the banks for three to five years. The bill does not include additional provisions for mortgage modification or principal reduction.
But candidates did agree across the aisle on another proposal that could affect the housing market and is the subject of much political debate these days: Neither the Republicans nor the Democrats we spoke with want Washington to mess with the mortgage tax deductions.
The mortgage interest tax deduction and the mortgage forgiveness tax deduction are two tax provisions awaiting renewal in the post-election lame duck session of Congress. Respectively, they allow homeowners to avoid paying taxes on the interest they incur on a mortgage (an incentive to buy) and avoid paying taxes on any part of their mortgage that is forgiven through modification (it would otherwise be counted as income, a turn of events that would make an underwater homeowner’s tax burden skyrocket).
Right now, the presidential candidates are debating the idea of capping tax deductions, a cap that would include mortgage tax deductions in the mix of deductions that could potentially be limited.
Titus said she was opposed to the idea of capping deductions because it could force middle-class taxpayers to make an awful choice between their homes or other equally vital parts of their lives.
“You’re going to make them choose if you want to stay in your home or you want to send your children to college,” Titus said. “I don’t support that.”
Heller said he wasn’t yet sure where he stood on the idea of capping tax deductions. But, he added, he did not like the idea of the mortgage deductions being in the mix.
“Having the homeowner’s deduction ... is critical to grow this economy,” Heller said. “We’re not going to get out of this if we eliminate that.”
Rep. Shelley Berkley, who is running against Heller for the Senate, expressed a similar position in an editorial board meeting with the Sun on Wednesday. She was also scheduled to speak at the homeownership rally Thursday but missed the event, which was timed to start closely after a rally in North Las Vegas with Vice President Joe Biden that ran late.
Berkley and Titus had been on stage with Biden; Titus explained to the crowd that Berkley had wanted to come but had to catch a plane, presumably to the northern part of the state.