With less than three months remaining until the presidential election, neither candidate has talked much about the troubled U.S. housing market, especially in foreclosure-riddled states like Arizona, California, Florida, Nevada and Michigan — all key swing states.
Clearly, President Barack Obama faces an uphill battle in swing states hurting from the mortgage crisis. The foreclosure rates in in those states are considerably higher than the national average.
Jean Braucher, a law professor at the University of Arizona’s James E. Rogers College of Law, wrote a guest post on Georgetown Law School professor Adam Levitin’s blog, Credit Slips, claiming the Obama administration has a serious case of “foreclosure fatigue.”
“Folks in Washington tell me there is a general sense of ’foreclosure fatigue’ in our nation’s capital,” wrote Professor Braucher. “It’s just so boring to keep thinking about all the people losing their homes year after year. Can’t we move on to something new? This attitude goes along with a failure to do anything meaningful to get out of the five-year-old mortgage crisis, still very much with us. More charitably, the people who would like to do something see no political opening in an election year.”
Republican presidential candidate Mitt Romney, who owns three houses, told the Las Vegas Journal-Review last year : “Don’t try to stop the foreclosure process. Let it run its course and hit the bottom.” He added: “Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up.”
Foreclosures remain a big economic problem. U.S. foreclosure starts were filed on 98,174 properties in July, up 6 percent on a year-over-year basis, according to RealtyTrac. Indeed, foreclosure starts increased on a year-over-year basis in 27 states, led by Connecticut (201 percent), New Jersey (164 percent), Pennsylvania (139 percent), Indiana (83 percent), and Massachusetts (65 percent) — all judicial foreclosure states.
Obama’s foreclosure assistance efforts have fallen short by overpromising and underperforming. In 2008, Obama promised to help 4 million distressed borrowers, but instead his programs have helped fewer than 800,000 underwater borrowers avoid foreclosure though permanent loan modifications, while 4 million lost their homes to foreclosure.
Looking ahead, the foreclosure crisis may be the most vexing issue on the political horizon during the 2012 presidential election. If the U.S. economy recovers in the next three months, and unemployment — and foreclosure starts — decline, president Obama could have a strong chance to win re-election.
If, on the other hand, the recovery remains sluggish, and unemployment — and foreclosure activity — spikes upward, the Republicans could recapture the White House. In short, Obama’s re-election hinges on a handful of battleground swing states battered by foreclosures.
Whoever wins foreclosure-riddled swing states — including Arizona, California, Florida, Nevada and Michigan — could play a central role in choosing the 45th president of the United States.
What do you think readers? Will housing and the foreclosure crisis become a more prominent issue as the election draws near? Or will the candidates ignore housing and concentrate on jobs, healthcare, immigration and foreign policy?