At a speech in Philadelphia, PA today, Democratic presidential candidate Hillary Clinton unveiled her four point plan to deal with the nation’s housing crisis. “I will start by facing our economic situation as it is, not as we wish it would be. That means acknowledging that our economic crisis is, at its core, a housing crisis, a crises caused in part by unscrupulous mortgage lenders and brokers and unregulated transactions in mortgage-backed securities, in part by speculators who were buying multiple houses to sell for a quick buck and other buyers who didn’t act responsibly.”
Clinton said that the housing crisis impacts all homeowners, no matter what type of mortgage they have. “When I talk about the home foreclosure crisis, sometimes people, I can tell, look at me a little skeptically because they, I can tell, they’re thinking to themselves, I didn’t buy one of those mortgages, I don’t have an ARM, I’m not at risk. But, in fact, that is just not the case. Home prices dropped almost 9% last quarter. Home prices for everyone. If you have paid off your home, if you have a fixed rate mortgage with a manageable interest rate, you have suffered the steepest decline on record. That means families have lost at least $1.9 trillion in housing wealth so far, nearly two-thirds of the size of the entire United States government budget.”
The first part of Sen. Clinton’s mortgage plan is the adoption of a proposal by Rep. Barney Frank and Sen. Chris Dodd. Their proposal would extend the Federal Housing Administration’s (FHA) capacity to guarantee restructured mortgages. She believes that the federal government should be more involved in the purchasing, restructuring, and selling of at risk mortgages. She also wants President Bush to appoint an emergency working group featuring prominent economists to study the problem.
Clinton says that many mortgage servicers are afraid to work with homeowners, so she wants to pass legislation to legally protect them when they try to help homeowners change their mortgages. She also is proposing a $30 billion “housing stimulus package” for states and localities fight foreclosures in their communities. In layman’s terms her solutions include help for the mortgage companies who then may help the homeowners, spend more money, and study the problem more. There is really nothing here that the average homeowner can listen to and understand.
There is nothing bold about her plan. She doesn’t say that her administration would set up a program to work with the most at risk homeowners and their lenders to refinance their mortgages. She doesn’t propose that judges be allowed to waive off debt caused by predatory lending. I really want to hear one of the candidates say that they will work to change the law, so this kind of crisis can never happen again. She takes the Frank-Dodd idea, which is a good one, but will take time to work, and endorses it. What kind of vision and leadership is that?
There is a reason why corporate America loves the Clintons. They talk a good game, but when it comes down to it, they do little to rock the boat. This plan is a collection of half steps that won’t do anything for those who need help now. Clinton wants to be a candidate of action, but it isn’t telling the voters what she will do in clear terms. This is the major reason why she is losing to a man that at very least emotionally connects with his audience.
Read Clinton’s speech: