Last week's presidential debate passed without any mention of the continuing housing crisis affecting millions of American families. Nothing on either candidate’s website provides any specifics on this issue, let alone answers the fundamental question about what is the role of the government in the housing finance market. The lack of debate around this issue is astonishing, given that the genesis of the continuing economic crisis was in the complete, global collapse of the housing market.
Now, there is no doubt that as the impending crisis was building during the early 2000s that there was plenty of blame to go around—from the unregulated (and arguably unscrupulous) brokers who peddled dangerous loans to unsuspecting borrowers, especially borrowers of color, exploiting their marginalization from the primary market; to Wall Street securitizers who cared little about the safety of these loans and were only interested in the next Big Innovation that would allow enormous profits, from PLS to CDOs to CDSs that floated somewhere in an unchecked $60 trillion shadow market. And yes, even to government officials who capitulated to the neo-liberal thinking that dominated political discourse from the 1970s onward that the free market reigns supreme, and systematically—over a period of 20 or so years—rolled back regulations that for decades had protected not only consumers, but banks as well. This thinking ultimately proved incredibly dangerous, but we should not have been surprised by this, given the hard lessons learned from the Great Depression and the housing market collapse of that period. Those lessons led to the creation of a housing finance system that propelled millions of Americans into the middle class over a period of four decades.
The common theme from all of this is that protections are needed; and only government can fulfill this need, to create well designed regulations that protect consumers from abuses of the worst kind—abuses that ultimately rob not only individuals of their financial security and the opportunity to generate wealth and provide resources to the next generation, but destabilize communities and ultimately, the entire economy.
And yet, there is little discussion by either candidate on any of this—on the need for safe and sound lending practices that support housing security, and thereby financial security; on the need to provide more support to the still hurting housing market; and the need to not only provide relief to the people and communities that have been pummeled by its collapse, but an affirmative commitment to help people and communities rebuild. Here are a few facts:
Almost 4 million Americans lost their homes to foreclosures between 2008 and 2012
$17 trillion in equity was stripped from American families, and the biggest hit fell on black homeowners (66 percent loss of wealth) and Hispanic homeowners (53 percent loss of wealth)
Research suggests that we aren’t even halfway through the foreclosure mess
Neither candidate has had much to offer, if anything, in the way of a detailed plan to move us forward. Neither has a plan that would protect homeownership, at the front and back end, ensuring not only access and affordability for responsible homeowners, but providing homeowners with options to protect the equity they have diligently built over the years.
A group of civil rights and housing advocates have organized a campaign that urges the candidates to answer the tough questions about how to bring our housing market back, and protect home opportunity: What will you do to address the lender misconduct and inadequate rules and enforcement that led to the current crisis and continue to threaten our economy? How will you ensure that families or individuals with the resources and desire to be successful homeowners are not thwarted by future misconduct, arbitrary restrictions, or a lack of sound information? How will you help rejuvenate neighborhoods devastated by predatory lending and mass foreclosures? And how will you ensure that people of all races, ethnicities, and communities have an equal opportunity to pursue the American Dream?
These are tough questions, but the American people deserve the answers. Now.
A national housing policy must address not only the need to recover from the recent market collapse, but also the housing crisis that existed before it: the lack of decent, affordable housing for everyone, a gap that impacts the lowest income Americans more than anyone else.