Will the President’s campaign trajectory resemble Jimmy Carter’s failed 1980 re-election bid, when a democratic incumbent was crushed by Republican California governor Ronald Reagan? Or will the President moon-walk his way into the White House like New York governor Franklin D. Roosevelt did in 1932, when a democratic challenger defeated Republican incumbent Herbert Hoover during the Great Depression?
While the economy, jobs, foreign policy and the federal deficit are all important issues, the Electoral College math is zeroing in on the Magnificent 7; seven foreclosure-riddled states, where foreclosure-displaced former homeowners may stay on the sidelines and allow Mitt Romney to pull off a Ronald Reagan-style upset.
Reagan, aided by the Iranian hostage situation and a worsening economy at home, painted Carter as weak domestically and internationally. A similar situation exists today. Internationally, Iran’s Islamic mullahs are racing to create a nuclear bomb and threatening to annihilate Israel.
Domestically, a deteriorating U.S. economy is hampering the president’s re-election efforts, with unemployment at 8.1 percent, and nearly 200,000 homeowners losing their properties every month to foreclosure. In 1980, Reagan won by a landslide, receiving the highest number of electoral votes ever won by a non-incumbent presidential candidate.
Can Governor Romney do the same?
With all the public chatter about Hispanics and young voters in Colorado, Florida and Nevada, the private chatter is buzzing about something different — a few super-swing states decimated by foreclosures, with 108 electors hanging in the balance for the candidate who captures the Magnificent 7.
The Magnificent 7 foreclosure super-swing states are: Florida (29), Ohio (18), Michigan (16), North Carolina (15), Virginia (13), Arizona (11) and Nevada (6). These foreclosure super-swing states have borne the brunt of the foreclosure crisis. All of them will be key battleground states where district-by-district political trench warfare will prevail.
Here’s a look at three of those seven foreclosure states. Next week, we’ll examine Michigan, North Carolina, Virginia and Arizona.
Florida — 29 Electoral Votes
With its 29 electoral votes, swing state status, and large Hispanic population, the Sunshine State is a must-win for both the GOP and the Democrats. In foreclosure-afflicted Florida, where overbuilding fueled the boom and bust, nearly every real estate market has lost 50 percent or more in home value. The state’s 8.8 percent unemployment rate, which exceeded the national average of 8.1 percent, has pushed 46 percent of homeowners underwater, meaning they owe more money on their mortgage than what their home is worth. And you can bet that housing will be a huge component to winning Florida.
Because Florida is an economic disaster zone sitting on a powder-keg of mostly distressed residential real estate. Florida has a staggering 371,000 open foreclosure cases that are currently clogging up the state courts. Another 530,000 residential mortgages are 90-days past due and in default. Moreover, 265,000 borrowers haven’t made a payment in two years or more. And banks own 150,000 Florida properties. So, incumbents beware: Florida voters are angry and career politicians are in their cross hairs.
Ohio — 18 Electoral Votes
Ohio is another foreclosure-afflicted state where housing will play a key role in the presidential election. With 18 electoral votes, Ohio has backed the winning candidate in the past 12 elections; so keep a close eye on this key state. But with unemployment painfully high at 7.2 percent, the incumbent faces an uphill battle to match his 2008 performance in here and other Rust Belt states.
In Ohio, the foreclosure crisis has gotten so bad that banks have a new remedy for the state’s ailing housing market: bulldozers. To drive housing prices higher, banks and Cleveland city officials have found a unique way to deal with the growing number of foreclosed homes: they destroy them. More than 50,000 Ohio homeowners are at least 90 days behind on their mortgage payments, according to the Mortgage Bankers Association.
If Florida and Ohio’s housing is in shambles, Nevada is worse.
Nevada — 6 Electoral Votes
Nevadans lead the nation in foreclosures, unemployment and personal bankruptcies. Nevada’s worst-in-the-nation housing crisis hasn’t loomed large in the election yet, but its housing bust is expected to be a big theme in the general election when both parties will fight to win the Silver State’s 6 electoral votes.
More homeowners are underwater in Nevada than any other state, with 70 percent of homeowners owing more on their mortgage than their property is worth. Nevada boasts the highest jobless rate in the nation, at 12.1 percent, compared to 8.7 percent when the incumbent won in 2008. The single-minded focus on the economy — and dire housing situation — is sure to dominate the general election in November in this state where Democrats barely outnumber Republicans and independents decide elections.
Will the incumbent follow Carter or F.D.R.?
Sign up for a RealtyTrac free trial for full access to pre-foreclosure, auction and bank-owned REO homes nationwide.
Heat Map: Foreclosures in Obama’s First Term
Foreclosures and the Presidential Race
How Foreclosures Will Change The Presidential Election