The two frontrunners for the Republican nomination for president assailed the Dodd-Frank reform legislation passed by Democrats in 2010 as a big factor in stalling the foreclosure crisis.
In their Florida debate last night, Mitt Romney and Newt Gingrich offered few specifics, other than repealing Dodd-Frank, as a remedy for helping millions of homeowners in Florida and across the nation who are mired in the foreclosure process or those who are “underwater” on their mortgages.
Romney, the former Massachusetts governor, has previously said the cure for foreclosures is “for the government to get out of the way” and let the process run its course.
Romney repeated his position Monday and added that Dodd-Frank has made it “harder for banks to re-negotiate mortgages.”
Gingrich, the former House speaker, went even further in condemning the legislation: “If they would repeal it tomorrow morning, you would have a better housing market the next day.”
Last month, the Federal Reserve proposed steps to strengthen supervision over large bank holding companies, including a range of requirements on capital and liquidity, credit exposure, stress testing and risk management – all actions mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Dodd-Frank’s goal is to prevent another financial crisis through strict oversight of the largest financial institutions. With the reform, federal regulators now have the authority to unwind failing financial companies that are deemed as posing a threat to the U.S. economy.
In last night’s debate, NBC news anchor Brian William gave Romney and Gingrich thirty seconds to address solutions for helping homeowners get out of foreclosure. Here are their answers:
Romney:
To help them. Of course, we help them. Pam Bondi (Florida Attorney General) here in Florida is cracking down on people who are committing fraud, No. 1. No. 2, you have to get government out of the mess. Governments created the mess. No. 3, you are going to have to help people get more flexibility out of their banks. Right now, with Dodd-Frank (financial reform legislation), we’ve made it harder for banks to re-negotiate mortgages to help people get out. And finally, you gotta get the economy going again with people having jobs. In Florida, with 9.9 percent unemployment and with 18 percent real unemployment and underemployment, you are not going to get housing recovered unless you get jobs created again.Gingrich:
First of all, if you could repeal Dodd-Frank tomorrow morning, you would see the economy start to improve overnight. The fact is, Dodd-Frank, has let the biggest banks to get bigger. It is crushing independent banks. It has an anti-housing bias. Federal regulators are slowing down and making it harder to make loans for housing. And it is crippling small business borrowing. All these things are functions of a bill passed by the Democrats called Dodd-Frank. If they would repeal it tomorrow morning, you would have a better housing market the next day.
