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Huntsman’s Departure Highlights Politics of Housing Finance

And then there were five.


Republican presidential hopeful and former Utah Gov. ""Jon Huntsman"":http://jon2012.com/ threw his support Monday behind frontrunner and former Massachusetts Gov. ""Mitt Romney"":http://www.mittromney.com/, calling for American energy independence, education reform, and protection from future bailouts. Veterans, young people, even ├â┬ó├óÔÇÜ┬¼├àÔÇ£complete strangers├â┬ó├óÔÇÜ┬¼├é┬Ø received their share of thanks from the exiting candidate in a farewell statement.

Not unlike his fellow candidates ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô or the incumbent himself ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô Huntsman left out any mention of housing finance reform and homeowners as issues for voters in the 2012 general election.

Of the Republican candidates left standing, few have taken a new stand on the housing issue. Romney offered his support for a foreclosure freefall last fall in an ""interview"":http://www.lvrj.com/multimedia/Five-questions-with-Mitt-Romney-132028338.html with The Las Vegas Review-Journal. The Hill ""reports"":http://thehill.com/blogs/on-the-money/1091-housing/204163-overhaul-of-fannie-mae-and-freddie-mac-unlikely-this-year that former House Speaker ""Newt Gingrich"":http://www.newt.org/ more recently renewed calls to remove ""Fannie Mae"":http://www.fanniemae.com/portal/index.html and ""Freddie Mac"":http://www.freddiemac.com/ from the mortgage marketplace.

President ""Barack Obama"":http://www.whitehouse.gov/administration/president-obama stepped up housing proposals in recent months, spearheading a new version of the Home Affordable Refinance Program and recess appointing Richard Cordray director of the ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/. But critics suggest these stabs at issues miss a meaningful need for cohesive policy.

Paul Miller, managing director with ""FBR Capital Markets"":http://www.fbr.com/, says that ├â┬ó├óÔÇÜ┬¼├àÔÇ£the Obama administration is quite content to use this crisis to bash the banks for his political gain.├â┬ó├óÔÇÜ┬¼├é┬Ø

He cites a ├â┬ó├óÔÇÜ┬¼├àÔÇ£vacuum in housing finance├â┬ó├óÔÇÜ┬¼├é┬Ø that forces various housing programs and incentives to ├â┬ó├óÔÇÜ┬¼├àÔÇ£work against each other,├â┬ó├óÔÇÜ┬¼├é┬Ø adding that the United States needs ├â┬ó├óÔÇÜ┬¼├àÔÇ£a consolidated housing finance policy.├â┬ó├óÔÇÜ┬¼├é┬Ø

Others suggest housing finance policy reform will likely fade as much as Afghanistan and Iraq in public imagination as Election Day nears.

""Mechele Dickerson"":http://www.utexas.edu/law/faculty/amd844/, chair of bankruptcy law and policy at the ""University of Texas"":http://www.utexas.edu/ Law School, says it is ├â┬ó├óÔÇÜ┬¼├àÔÇ£not politically feasible├â┬ó├óÔÇÜ┬¼├é┬Ø for candidates to attempt a meaningful conversation with voters about housing finance this year.


├â┬ó├óÔÇÜ┬¼├àÔÇ£I can├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ót think of any way you can come up with a long-term sustainable policy that won├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ót gore a number of valuable livestock,├â┬ó├óÔÇÜ┬¼├é┬Ø she adds, a reference to any number of special interests and political action committees at play for candidates in 2012.

Recent polls suggest that the political will exists to make housing finance policy a platform issue. In December a ""National Association of Realtors"":http://www.realtor.org/ poll found that one-third of likely voters wanted to hear more about housing solutions from presidential candidates.

The ""National Association of Home Builders"":http://www.nahb.com/ (NAHB) conducted another poll in early January that found three out of four likely voters agree that it is ├â┬ó├óÔÇÜ┬¼├àÔÇ£appropriate and reasonable├â┬ó├óÔÇÜ┬¼├é┬Ø for the federal government to support homeownership with tax incentives. Of these respondents, 84 percent identified as Democrats; 71 percent, as independents; and another 71 percent, as Republicans.

In the same poll, a full 73 percent of voters disagreed with any endeavor to eliminate the mortgage interest rate deduction, with 68 percent vowing to oppose any candidate for public office who proposes to abolish it.

├â┬ó├óÔÇÜ┬¼├àÔÇ£Those running for office in November need to understand that voters will not look kindly on any candidates who seek to dismantle the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós long-term commitment to homeownership,├â┬ó├óÔÇÜ┬¼├é┬Ø Bob Nielsen, NAHB president and a Reno-based homebuilder, said in a related statement.

""Mark Calabria"":http://www.cato.org/people/mark-calabria, director of financial regulation studies at the conservative-leaning ""Cato Institute"":http://www.cato.org, casts doubt on the accuracy of such polls.

├â┬ó├óÔÇÜ┬¼├àÔÇ£Their questions tend to be loaded,├â┬ó├óÔÇÜ┬¼├é┬Ø he says, adding that some interest groups may try to ├â┬ó├óÔÇÜ┬¼├àÔÇ£spin poll results├â┬ó├óÔÇÜ┬¼├é┬Ø to curry favor for their policy initiatives.

He also suggests that candidates may not feel the need to address issues involving housing finance, since of the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós four hardest-hit states ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô Arizona, California, Florida, and Nevada ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô only the Sunshine State is a swing state. Party affiliation alone would likely help candidates bag the others in general election.

Dickerson says this is a missed opportunity for meaningful reform.

├â┬ó├óÔÇÜ┬¼├àÔÇ£What is frustrating to me is that we have this moment where we clearly have a housing crisis and we haven├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ót seen very many creative proposals to get us out of it,├â┬ó├óÔÇÜ┬¼├é┬Ø she says. ├â┬ó├óÔÇÜ┬¼├àÔÇ£Historically, we├â┬ó├óÔÇÜ┬¼├óÔÇ×┬óve always seen innovation to address our crises.├â┬ó├óÔÇÜ┬¼├é┬Ø

With Huntsman now gone, GOP candidates include Gingrich, Romney, Texas Gov. ""Rick Perry"":http://www.rickperry.org/, former Sen. ""Rick Santorum"":http://www.ricksantorum.com/ (R-Pennsylvania), and Rep. ""Ron Paul"":http://www.ronpaul2012.com/ (R-Texas). The next Republican primary will take place Saturday.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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