Vail Daily column: What do parties say about housing and mortgages?
July 29, 2016
If you imagined that the presidential race could not get much more convoluted, then sit down and read the party platform statements. Also, please be sure you have a few grains of salt on your margarita glass while you are reading them.
Since housing and mortgages are two of my pet subjects, I decided to look points made by both parties. The Republicans actually have some reasonable ideas and some unreasonable ones.
They pose that the lending rules should be largely decided by the free market, with some government oversight and assistance. The platform notably backs off of the previous chorus of Republican voices calling for getting rid of Fannie Mae and Freddie Mac, and describes in some ways the two agencies should be allowed to operate freely again.
The GOP also calls for reigning in the Consumer Finance Protection Bureau. While that bureau has a name that sounds as though it would rally for the rights of orphans and widows, it's far more complex than that. As someone who has to deal with this little dictatorship — er, sorry, I meant to say agency — I'm of the firm opinion that if we turned the job over as a group project to a bunch of six-year-olds, the American people would be better served.
The Consumer Finance Protection Bureau was designed to be unaccountable to Congress or the American people, and has unnecessarily created considerable havoc in the U.S. mortgage markets. All of its accomplishments are of questionable benefit. They enforce by decree, often make up the rules as it suits their short term agenda and target small institutions that do not have a billion dollars to spend on lawyers. It was an interesting social experiment, but it's not working.
Another interesting point raised by the Republicans is limiting FHA to serving only low- to middle- income individuals. The question remains — who decides what high income constitutes? In our area, FHA loans are becoming more and more popular with families making over $100,000 a year, which here is middle class, but which would be viewed as "helping the rich" in most of the states. I can't abide by that idea. Very few truly wealthy people would bother with an FHA loan; they are more expensive and really don't serve anyone who could otherwise get a conventional loan.
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On the other hand
The Democrats have some contrasting views on the subject. The Dems just love the Consumer Finance Protection Bureau, probably because it was a pet project of the Obama administration. They are conveniently blind to its misdeeds.
The Democrats acknowledge there is an affordability crisis in housing in many markets, but they do not pose any solutions. They are completely silent on the future of Fannie Mae and Freddie Mac, and don't mention FHA even once, which is not surprising, because FHA has pretty well addressed its problems and is profitable and does not pose any real threat to the taxpayers that I can see. The mention of limiting the agency by the Republicans seems more intentional inflammatory rhetoric than anything.
The Dems also note that "the Republican Nominee" — they can't seem to bear to mention his name — bet big on the housing crisis and profited from it.
Overall, it's a mixed bag, and housing and mortgages make up only a few paragraphs of these 50-page-plus documents, and there are opposing points on dozens of issues. Certainly the two individual candidates could not be more opposite. It's hard to completely disagree with either candidate or their platform. It seems that this time around we truly are charged to decide who we disagree with the least.
Chris Neuswanger is a loan originator at Macro Financial Group in Avon and may be reached at 970-748-0342. He welcomes mortgage related inquiries from readers. His blog and a collection of his columns may be found at http://www.mtnmortgageguy.com.
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