So many idiotic things were said about housing during the Wednesday night GOP debate. Oh, where to start?
We had Newt Gingrich claiming that banks profit more from foreclosures than they do from short sales. I'd like to hear from all the banks "profiting" from either foreclosures or short sales.
Then we had Michele Bachmann, who in the Las Vegas debate told moms in foreclosure to "hang on," asserting that Fannie Mae
and Freddie Mac
are destroying housing and "we need to put them back into bankruptcy and get them out of business." Technically they are in conservatorship and losing money, what some might say is akin to bankruptcy, but I don't think either has ever filed for bankruptcy protection or come out of bankrupcty (or conservatorship) in order for her to put them back in. And, Fannie and Freddie are pretty much "the" housing market right now.
Ron Paul, meanwhile, said prices on mortgages are too high, and that's being done to prop up the banks.
In his own words: "We face a housing crisis once again because it's price-fixing. They're fixing the prices of these mortgages too high, and this is why nobody will buy them. This is why you have to get rid of Fannie Mae and Freddie Mac, sell all of that into the marketplace. And the reason they do this is to prop up the banks, because the banks have invested in Europe, they've invested in Fannie Mae and Freddie Mac, and these credit defaults swaps."
I diverge. Let's get back to Gingrich, who asserted that he wasn't greasing any wheels in Washington on behalf of Freddie Mac when his firm received $300,000 from the GSE at the height of the housing bubble. The great advice he gave was ignored, he blithely admitted.
"I offered advice. My advice as a historian when they walked in and said we are now making loans to people that have no credit history and have no record of paying back anything but that’s what the government wants us to do. I said at the time, this is a bubble. This is insane. This is impossible."
Yes, that's insane, or should I say asinine because Freddie doesn't originate loans.
Herman Cain seemed totally stumped by the Fannie/Freddie question and tried his best answer with his 9-9-9 plan, but the questioner brought him back to reality and he fumbled through an answer about privatizing the GSEs after being put on the spot. (I guess that 9-9-9 may not solve all the country's problems, after all.) As Texas Governor Rick Perry would say in a situation like this: Oops.
Mitt Romney stuck to his free market script but gave no details on what exactly that means for housing. In fact, he seemed to puff out his chest when CNBC anchor Maria Bartiromo noted that his 59-point economic plan says not a word about housing. "Yes," he said, proudly, "because it's not a housing plan. It's a jobs plan."
Making some sense was Rick Santorum, who didn't get much air time but said he sought to put curbs on Fannie and Freddie before the housing bubble burst.
Former U.S. Ambassador to China Jon Huntsman seemed to be the only candidate to acknowledge that the housing crisis is causing real hardships on Main Street.
"Let me just say, on the housing discussion here, lost in all of this debate is the fact that there are people tuning in tonight who are upside down in terms of the financing of their homes. They are feeling real pain. People who probably heard today that they lost a job. These issues are very real. They are complicated. For us to say that there is an easy solution to housing, that's just not right, and that's not fair."
Do we have a new frontrunner?
Write to Kerry Curry
Follow her on Twitter @communicatorKLC