Our guest blogger is John Griffith, a Policy Analyst with the housing team at the Center for American Progress Action Fund.

President Obama is understandably reticent to tout his housing record, especially in swing states hit hard by the five-year foreclosure crisis. But with the early stages of a housing recovery underway, it’s time for the president to look his public in the eye and state a simple fact: the housing market is better off now than it was four years ago.

Nearly every housing indicator supports that claim. Compared to February 2009 — the first full month of the Obama presidency — today’s home sales are up nearly 20 percent, housing construction is up 50 percent, and foreclosure activity is down to a five-year low. Average home prices are down slightly since Obama took office, the only major indicator that’s worse off. But we learned this week that home prices rose in August for the seventh consecutive month after adjusting for seasonal changes.

Improvements in the housing sector tend to drive growth in the broader economy, as each home built creates about three full-time jobs, $90,000 in new tax revenue, and thousands more dollars of spending on home-related products. Obama can credibly say that his housing policies have helped spur growth.

When Obama took office, the housing market was in free fall. Home prices were plummeting, home sales and construction were steadily declining to fractions of historic norms, and foreclosures were rising at a near-record clip. Nearly four years later, we’re seeing a very different trajectory.

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Despite the substantial improvements in the housing market recently, foreclosures and underwater mortgages continue to weigh down the economy. One of the most acute problems is that foreclosures don’t only harm the family that loses a home, but also drag down property values for entire neighborhoods, sinking more households underwater (meaning the house is worth less than the amount outstanding on its mortgage).

According to a new report from the Center for Responsible Lending, homeowners will lose nearly $2 trillion in property value due to living near foreclosed properties:

– $1.95 trillion in property value has been lost or will be lost by residents who live in close proximity to foreclosures. These losses include both the spillover impact of homes that have completed the foreclosure process and future losses that will result from homes that have started but not yet completed the foreclosure process.

– Over one-half of the spillover loss is associated with communities of color. Minority neighborhoods have lost or will lose $1 trillion in home equity as a result of spillover from homes that have started the foreclosure process, reflecting the high concentrations of foreclosures in neighborhoods of color.

– On average, families affected by nearby foreclosures have already lost or will lose $21,077 in household wealth, representing 7.2 percent of their home value, by virtue of being in close proximity to foreclosures. Families impacted in minority neighborhoods have lost or will lose, on average, $37,084 or 13.1 percent of their home value.

The Obama administration has implemented several foreclosure prevention programs, but they’ve fallen short of their goals, with just a fraction of the money earmarked for them having been spent. At least the administration has finally come around to recess appointing a replacement for Acting Federal Housing Finance Agency Director Edward DeMarco, who has blocked crucial aid for homeowners.

As part of the $25 billion foreclosure fraud settlement forged between the nation’s five biggest banks and a coalition of federal agencies and state attorneys general, individual states were granted $2.5 billion. That money was meant to provide a variety of services to troubled homeowners, but, as a new report from the housing advocacy organization Community Enterprise Partners shows, less than half of that money is actually headed for its intended use:

Six months after finalizing the landmark $25 billion National Mortgage Settlement, the District of Columbia and the 49 states who were parties to the settlement have been allocating and distributing their respective shares of the $2.5 billion that was designated for them, but less than half of the announced expenditures will be used as intended. Direct payments to the states were intended to help prevent foreclosures, stabilize communities, and prevent or prosecute financial fraud. To date, states have announced plans to spend $966 million for housing and foreclosure-related activities, while $988 million has been diverted to states’ general funds or for non-housing uses. There is $588 million remaining to be allocated, of which Texas and Florida comprise the lion’s share and with the rest spread out among states that have already begun to roll out their plans.

As this map shows, several states are using a minimal amount of their settlement funds to help homeowners, while a few (including California) are using none at all:

Both Democratic and Republican governors are guilty of siphoning off funds meant for homeowners. Meanwhile, the banks continued their abusive practices that led to the settlement in the first place.

Irish lawmakers are contemplating a measure that would make it easier for underwater homeowners to reduce their mortgage debt. As the New York Times reported, “The initiative, which would lower a borrower’s monthly payment, could prevent a tide of foreclosures, an uncertainty that has been hanging over the Irish housing market for years”:

While banks aren’t required to reduce the mortgage debt, the legislation gives them a powerful incentive to write down mortgages for troubled borrowers. Under the new rules, it will be less onerous to declare bankruptcy, making it easier for people to walk away from their homes altogether. As the threat rises, banks are more likely to reduce homeowners’ debt, rather than risk losing the monthly income and getting stuck with the property.

“For the banks, where there are losses, they have to be recognized,” said Alan Shatter, Ireland’s justice minister, who has sponsored the new law, called the Personal Insolvency Bill. “This legislation gives homeowners hope for their future.”

As ThinkProgress has reported, Iceland had significant success with a debt forgiveness program that it implemented to help it recover from the 2008 financial crisis. Ireland’s move is in the same vein.

Here in the U.S., however, such measures have not been put into place. In 2009, the banking lobby and Senate Republicans blocked a bill that would have allowed judges to write down mortgages for homeowners in bankruptcy. That defeat prompted Sen. Dick Durbin (D-IL) to pronounce that, when it comes to Congress, the banks “frankly own the place.”

Federal Housing Finance Agency director Ed DeMarco, meanwhile, has prevented government backed mortgage giants Fannie Mae and Freddie Mac from writing down federal loans for underwater homeowners, even though several analyses show that doing so would be good for both homeowners and taxpayers. A bipartisan bill before Congress has the potential to help hundreds of thousands of underwater borrowers stay in their homes, but hasn’t gone anywhere.

The nation’s five biggest banks signed a settlement in February with the Department of Justice and most of the nation’s state attorneys general that allowed the banks to avoid going to court for their role in the foreclosure fraud scandal. Under the terms of the settlement, the banks agreed to pay $25 billion and end certain abusive practices.

However, a new report from the California Monitor, an office overseeing the settlement, found that the banks continued at least one pernicious practice until the last possible moment:

The Settlement provided banks with an implementation period to change their practices. Banks agreed to make all changes by one of three deadlines: 60 days, 90 days, or 180 days. While some changes, such as implementation of a single point of contact for borrower communication, occurred quickly, the banks have taken the full 180 days (six months) to stop dual tracking. This is permissible under the Settlement.

But this waiting has been painful for homeowners, whose fate is uncertain under the dual track regime. To date, dual tracking has continued. As the graph illustrates, the California Monitor Program has received dozens of requests for help each month from families who have submitted loan modification applications but fear that foreclosure will occur, despite their hard work. In August, 25% of complaints received by the California Monitor stated a dual tracking problem.

“Dual-tracking” is the practice of continuing the foreclosure process even as a homeowner is being evaluated for a mortgage modification. It has caused problems for borrowers with several large banks, and results in borrowers faithfully making payments while awaiting a permanent mortgage modification, but seeing their homes foreclosed upon and sold out from under them anyway.

California outlawed dual-tracking entirely in its recent Homeowner’s Bill of Rights. And as this report from the California Monitor shows, banks aren’t willing to end dual-tracking until the law forces them to do so. (HT: Ben Hallman)

President Obama will square off in a debate against his Republican opponent Mitt Romney in Denver, Colorado tonight. According to the latest data, Colorado is in the top ten states in the nation for foreclosures, with one out of every 617 housing units receiving a foreclosure notice in the month of August. Housing has remained a consistent drag on the economy over the last several years.

If the candidates are asked about housing policy, and there’s certainly no bet that they will be, neither of them has much of a record at which to point. Romney recently released his housing “plan,” which was nothing but vague assertions and right-wing rhetoric. For foreclosure prevention, all the plan says is “a Romney-Ryan Administration will bring clarity in this area.”

The paper also gives no specifics about Romney’s plan to reform government backed mortgage giants Freddie Mac and Fannie Mae, but merely asserts that reform will take place. So far, the clearest sign of what a Romney administration would do on housing comes from his statement that the foreclosure process should “run its course and hit the bottom.”

Romney’s refusal to release any details is a bit surprising considering the Obama administration’s weak record when it comes to housing. The Home Affordable Modification Program (HAMP), which was supposed to prevent three to four million foreclosures, has resulted in 825,000 permanent mortgage modifications; one million borrowers, meanwhile, have started the program without successfully navigating it to the end. According to a recent report, recalcitrant banks caused 800,000 more foreclosures under HAMP than they should have.

Obama’s Federal Housing Finance Agency — which regulates Fannie Mae and Freddie Mac — has steadfastly stood against the two mortgage giants providing principal reductions to homeowners with federally backed mortgages, even though principal reduction is one of the surest ways to keep a borrower in her home. Adding insult to injury, the FHFA is planning to punish homeowners in states that make it harder to foreclose by raising their fees.

This seems to be a ripe topic for discussion, if moderator Jim Lehrer decides to ask about it. Hopefully he does better with the subject than CNN’s Wolf Blitzer.

A nonprofit group that supports fair housing has filed a lawsuit claiming that Bank of America, the nation’s second largest mortgage servicer, has failed to maintain and market foreclosed homes in African American and Latino neighborhoods the same way it does in white neighborhoods.

The National Fair Housing Alliance filed the complaint with the Department of Housing and Urban Development after examining Bank of America-owned properties in eight American cities and finding “significant racial disparities” in how the properties were maintained and marketed to potential buyers, Reuters reports:

The group reviewed 373 properties owned, managed or serviced by Bank of America in eight U.S. cities as part of its ongoing examination of how U.S. lenders maintain bank-owned properties. Investigators evaluated properties for problems such as broken windows, overgrown lawns, trash accumulation and a lack of “for sale” signs.

“We have found significant racial disparities,” Shanna Smith, chief executive officer of the National Fair Housing Alliance in a conference call with reporters.

NFHA filed similar complaints against Wells Fargo, the nation’s largest mortgage servicer, and U.S. Bancorp earlier this year after it released a report detailing the disparities between white and black and Latino neighborhoods. The report looked at bank-owned homes in nine cities and found that properties in black and Latino neighborhoods were more likely to be left in disrepair than homes in white neighborhoods, driving down home prices, increasing vagrancy and crime rates, and making it harder to sell homes in those neighborhoods.

Discrimination was widespread throughout the mortgage and foreclosure process leading up to and after the housing crisis. Black and Latino borroweres were twice as likely to have been affected by the crisis because banks that used predatory practices against borrowers were even more predatory toward minorities. Pushing qualified lenders into subprime loans cost minorities as much as $100,000 in additional interest payments.