Real Estate And The 2012 Election

As we enter the new year, we face the likely hood that it will be business as usual in the Real Estate market. According to Time Magazine, the new Case-Shiller housing numbers show that home prices dropped 3.7 percent from the year before.  The Case Shiller report also shows that home prices have dropped in 19 of the 20 cities tracked, making it clear that we’re still feeling the side effects of the Real Estate bubble that has made foreclosures and short sales the new normal in Real Estate. If you haven’t noticed, this year is an election year where Republican candidates Mitt Romney, Newt Gingrich, Rick Santorum, and Ron Paul are trying to win the Republican nomination and challenge President Obama in this years Presidential Election.

All of the candidates have addressed a number of pressing issues regarding the economy, more specifically, the Real Estate industry. Most if not all the candidates blame the government in one way or the other for the housing crisis. Mitt Romney has scrutinized Fannie Mae and Freddie Mac as the main reason why the housing crisis occurred. Newt Gingrich has also been critical, advocating the the mortgage giants be broken into smaller pieces and eventually phased out.

Both Gingrich and Romney have tried to connect one another to the mortgage giants, Gingrich through his advising service to Freddie Mac where he earned a nearly 2 million dollar pay day, and Mitt Romney, through his personal investments. Rick Santorum has also shown his displeasure with Fannie and Freddie, but it is Ron Paul who has been the most vocal and consistent with not just Fannie and Freddie, but about the Federal Reserve, who he believes created moral hazard throughout the financial system due to record low interest rates that ultimately created the housing  bubble. Ron Paul has had a history of warning the American people about the coming crisis, which has helped him gain considerable traction with staunch fiscal conservatives.

President Obama recently announced new legislation called the “Homeowners Bill of Rights” that allows homeowners to refinance their mortgages even if they are underwater, giving them the chance to lower their payments and pay off their mortgage faster.  However, similar programs like the Home Affordable Modification Plan did little to ease the burden on homeowners. According to the Huffiington Post, over 80% of borrowers could not even qualify for the plan, questioning if Obama’s new mortgage modification plan will even benefit most homeowners.  This election will determine the direction of the U.S economy, making the 2012 President Election the most pivotal election in recent memory.

 

 

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~ by fnunez on February 2, 2012.

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