During last night’s GOP primary debate in Nevada, the candidates managed to completely avoid any meaningful discussion of the nation’s ongoing housing crisis, despite being in the state that has led the nation in foreclosures for 56 consecutive months. But outside of the debate setting, several candidates are making their lack of concern for homeowners’ woes well known.
In a meeting with the editorial board of the Las Vegas Review Journal, Romney said his plan to help homeowners is “don’t try and stop the foreclosure process.” Former pizza magnate Herman Cain said he would “get government off the back of the banks” to prevent foreclosures. And evidently Newt Gingrich feels the same way, telling Fox News’ Greta Van Susteren last night that “you have to repeal the Dodd-Frank bill,” the landmark financial reform law signed last year, in order to see “a dramatic decline in foreclosures”:
You have to repeal the Dodd-Frank bill, because the way the Dodd-Frank bill works, it dramatically, regulates the banks, it sends a signal to the regulators to tell them not to make the loans, not to roll over the money, and in effect it encourages foreclosures and encourages the bank actually seizing the property. So until you repeal the Dodd-Frank bill, which I think the House Republicans ought to do this week, I mean this is a terrible bill which is killing housing, it is killing small banks, it is killing small businesses, and it ought to be repealed. The minute you do that, literally, the minute you do that, it’s going to be easier for people to work their way out, you’ll have a dramatic decline in foreclosures.
Susteren replied, “I guess you trust banks more than I do.” “What’s the incentive for the bank to help the person out?” she asked, shockingly placing her in agreement with ThinkProgress,. Gingrich doubled down, saying that if only banks were allowed to treat borrowers however they wanted, foreclosures would decline.
However, as Tanya Somanader wrote earlier, banks have shown little interest in helping borrowers who are in trouble. “Instead, banks unleashed ‘robo-signers,’ officials who sign foreclosure forms without reading them, and managed to set a foreclosure record last year despite their self-imposed foreclosure moratoriums,” she said.
Indeed, the banks have shown that, left to their own devices, they will sucker borrowers into subprime loans, securitize and sell those loans around the world, and then drag their feet when it comes to approving loan modifications for troubled borrowers. All removing Dodd-Frank would do is ensure that the same practices that led the country into its current mess are allowed to continue unabated, ensuring that another generation of would-be homeowners gets sucked into Wall Street’s morass.