Bloomberg News: Housing is Presidential Elephant-in-the-Room

What will presidential candidates Barack Obama and Mitt Romney do about the housing crisis? It’s anybody’s guess, write Bloomberg News editors in an article urging the candidates to talk about this overarching topic. That’s because they haven’t talked about it. 

For an economy that’s growing at an anemic rate of 1.5 percent, you would think there would be more discussion of the U.S. housing market on the campaign trail. The sector has powered past recoveries and is responsible for as much as one-fifth of gross domestic product.

Yet President Barack Obama has made little more than a passing reference to housing in his campaign, calling it a drag on the economy and recommending an expanded mortgage-refinancing program. Presumptive Republican nominee Mitt Romney has said the government should avoid intervening and allow the housing market to “run its course,” wherever that may lead.

…The Obama administration’s efforts to help struggling homeowners through various loan modification programs could charitably be termed timid, incremental and largely ineffectual. One in five mortgage borrowers owe more than their homes are worth, the same level as when Obama came into office. Many still pay high interest rates because they can’t refinance. Three taxpayer-subsidized mortgage juggernauts — Fannie Mae, Freddie Mac and the Federal Housing Administration — account for more than 90 percent of the financing that does occur, helping keep private capital on the sidelines.

Read the original editorial on Bloomberg News.

Written by Elizabeth Ecker

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