Thursday, Oct. 27, 2011 | 2 a.m.
For months the housing crisis was the issue every politician would rather ignore. But in a matter of days, distressed housing has become the subject of candidates’ solution-making — though the solutions may not be the type Nevadans were asking for.
President Barack Obama’s administration on Monday released a plan to help more homeowners manage their mortgage payments. But by the time Air Force One touched down midday in Las Vegas, locals were already complaining that his fixes didn’t address the severity of the situation in Nevada, or help those most in need.
Mitt Romney and other Republican presidential candidates saw a bigger backlash after saying the free market should dictate which underwater homeowners will sink or float — and Democrats have been up in arms at Romney’s suggestion that the housing market should be allowed to “bottom out.”
Meanwhile, a sleeper candidate in the race is quietly offering the prescription for foreclosures that Nevadans appear to be clamoring for.
“What you want to do is renegotiate mortgages. You want to try to help keep people in their homes,” Newt Gingrich told the Las Vegas Sun in an interview after the Republican debate last week. “If the house has dramatically changed in value, you want to find an equitable way to share the burden of that, and you want to minimize forcing people out of their homes.”
Push banks to renegotiate mortgages and share in the losses with homeowners? How?
“I’d write rules to make it profitable for banks to do it,” Gingrich said.
He disagrees with his Republican colleagues that the free market will find a fair way to let the banks and homeowners work things out.
“Right now ...(banks) actually have an advantage foreclosing over working it out,” he said, blasting the rules that accelerated the devaluation of homes in entire neighborhoods once certain mortgages began to fail. “We’re saying, ‘gee if you can sell your house for less than the original mortgage, the bank and you could split the cost.’ ”
But banks see no reason to do that “because if the bank forecloses, they acquire your asset. There’s a natural bias in favor of foreclosure,” he said.
Gingrich did not have the opportunity to articulate his foreclosure position during the debate. In fact, Gingrich hasn’t been achieved the role of front-runner or headline grabber in this campaign.
Several GOP candidates have seen their fortunes rise and fall in this election season, but Gingrich has been a steady second-tier candidate. A poll released this week put him in third place in Nevada, behind Mitt Romney and Herman Cain.
Even though the current leaders of the Republican party have emulated his efforts, such as with the “Pledge to America” they rolled out just before a House takeover in the 2010 midterms, Gingrich has fallen outside the fold.
He had a rough start to his campaign — most of his senior staff walked out on him this summer. He has also appointed himself unofficial referee of the televised debates, challenging moderators over their questions as much as his competitors over their positions.
And about those positions: Many of them — such as his position on confronting the housing crisis — are more moderate than the rest of the GOP field. Though like a good Republican, he still directs his blame at Democrats in power.
“The bias against housing among the elites is amazing. They want the housing industry to shrink,” he said. “They believe Americans are overhoused, overleveraged, and therefore they would like to go to a country where other things are bigger and housing is smaller — well guess what? If you’re a homeowner who was part of the last half-century commitment to living in a home, you just got caught.”