Housing Crisis Looms Larger in Campaign

Wall Street Journal (01/11/08) P. A6; Frangos, Alex
Rising foreclosure rates have the presidential candidates bringing up the state of the housing market more often in their speeches--particularly as they work to build voter support in states that have been hit hard by the housing downturn, including Florida, Michigan and Nevada. However, Harvard Law School professor Elizabeth Warren notes, "The candidates need to thread a very small needle, showing they have sympathy for those cheated out of homes, but not offering a government handout to businesses or individuals who deliberately took on huge risks." Democratic candidates are pushing for a national fund that would assist homeowners in refinancing adjustable-rate loans, legislation that would allow lenders to modify mortgages more easily and stricter lender regulations. Sen. Barack Obama, D-Ill., meanwhile, believes that non-itemizing homeowners should be given a mortgage interest deduction. Republican candidates, for their part, have voiced support for the Bush administration's plan to encourage lenders and investors to modify problem loans on a voluntary basis.