Congressman Dean Heller (R-NV2) managed to get a “moderate” label attached to his candidacies in Nevada, but his voting record in Congress has been more closely associated with the radical right wing of the Party. The Nevada Democratic Party provides three recent examples. (Jobs, Foreclosures, Border Security) The problem with this stance is that it is also at variance with the anti-immigration reform rhetoric coming from the same wing of the same political party.
Heller’s 2006 stance on immigration from his campaign website: “Stop Illegal Immigration and Defend Our Borders: Dean Heller opposes amnesty for those that enter America illegally. Immigrants that wish to become citizens must follow our laws. In Congress, Heller will support increased efforts to defend America’s borders and protect us from anyone that wants to do harm to Americans. Heller will defend our freedom, and our way of life in Nevada.” This was all well and good until Congressman Heller decided to join the House GOP slash and burn budget parade, and in February 2011 voted to cut funding for 250 border patrol and customs agents. Republicans responded to criticism saying they would retain funding for more detention facilities and raise salaries for current border patrol agents. [AZCentral]
What the Department of Homeland Security requested more agents, to perhaps “increase efforts to defend America’s borders?” Just in case anyone might question why the House Republicans would want to cut the number of agents, but keep funding for detention facilities, part of the answer may lie in the fact that Corrections Corporation of America had as of 2008 some 10,000 “beds” in development, and got a lucrative contract with ICE for the operation of the Hutto Detention Center in Texas in 2005. [CCA] CCA’s main competitor, Wackenhut, got a 2003 contract with ICE for the Broward County, FL detention center for women. [HB] Evidently, it is more important to House Republicans to maintain the sanctity contracts between ICE and CCA and/or Wackenhut Corrections, and to subsidize the salaries of their employees, than to increase the number of border patrol and customs agents along American borders?
Here’s Congressman Heller on Foreclosures: “Homes in foreclosure strain local governments too, since they often become sites for crime or other neighborhood problems. Just one foreclosure can impose up to $34,000 in direct costs on local government agencies, including inspections, court actions, police and fire department efforts, potential demolition, unpaid water and sewage, and trash removal. ” Point well taken, homes in foreclosure do, in fact place a tremendous burden on local governments. However, in the interest of keeping the government out of the housing market, Heller voted to gut a new program to assist homeowners with refinancing.
The Administration sought to use $62 billion of the TARP funding for banking institutions to assist FHA homeowners refinance mortgages, the idea being that if most of the problems associated with repaying TARP funds were related to the home mortgage market then it would make sense to direct that refinancing to minimize foreclosures would alleviate part of the problems. The FHA program was initiated in November 2010. Two months later House Republicans were ready and willing to ditch the program because it had only served 42 families — in the face of persistent opposition from mortgage holding financial institutions which did not want to offer any refinancing as part of the acceptance of TARP funding. [NewsY] Congressman Heller has made much, and will no doubt seek to make more, of his vote against the TARP bank bail out. However, his attempts to characterize this vote as “against TARP,” should be moderated by the fact that his vote on this issue is nicely aligned with the wishes of the Mortgage Bankers Association and their financial institutional allies.
H.R. 830, which Congressman Heller supported, would end the refinancing program which allowed under-water homeowners to refinance with less expensive FHA loans. [roll call 171] Congressman Heller also supported H.R. 836 that would terminate the Emergency Mortgage Relief Program which helps homeowners who have lost jobs to continue making mortgage payments. [ABA] [roll call 174]
Congressman Heller went one step further away from his initial concern for local governments plagued with abandoned housing. On March 16, 2011 he voted in favor of terminating the Neighborhood Stabilization Program [roll call 188] which provided aid to local governments which have high rates of foreclosures and abandoned property. The corporate position on the NSP was that it was a waste of tax payer funds that did not assist individuals facing foreclosure, and that allegations of misuse of funding were noted by the HUD inspector general and the GAO. [NMBA] The criticism is a far cry from the actual GAO recommendation: ” GAO recommends that HUD provide additional guidance to NSP grantees and HUD field staff to help ensure that information on output measures is collected in HUD’s data system in a more consistent manner. HUD agreed with the report’s recommendations.”
Those criticing the Department of Housing and Urban Developments work, by citing the report from the Inspector General’s office may also be doing some highly selective reading. The IG’s scope report for FY 2010 actually says: [pdf]
“Programs and Housing Management Entities: During fiscal years 2007 and 2008, OI developed significant investigations that uncovered public corruption in the management of housing projects as well as the administration of grant programs funded to state and local governments. As a result, OI is proactively targeting underperforming grantees and management entities to detect early signs of fraud and abuse in these HUD funded program areas. Working jointly with the Department to identify this corruption, OI has put in place a strategy to aggressively weed out the criminal element trying to take advantage of these tax dollars. Training has been established for all Special Agents that will assist them in their investigations. Each OI Regional office is tasked with targeting underperforming grantees and housing management entities to root out fraud operations by using the assets of the Department such as REAC and Multifamily Asset Management as well as enlisting the support other Federal and local law enforcement agencies. OI is also closely monitoring the progress of the Neighborhood Stabilization Program (NSP), which provide $3.9 billion in formula grants to local communities to address the problems associated with foreclosed and abandoned properties.” (emphasis added)
It appears that critics of the NSP decided to focus on the “early signs of fraud and abuse,” and ignore the part where the Department will boost training and oversight to “root out fraud operations.”
The next target in House Republican sights is HAMP (Home Affordable Modification Program]. Full program information here (pdf). The initial intentions were good: “The purpose of HAMP is to help homeowners who are making their mortgage payments on time but their homes are underwater. As long as the amount of the loan is less than 125 percent of the home’s value, homeowners are eligible for a HAMP refinance. This allows homeowners to refinance when their home is underwater and they had not been eligible to refinance.” [LenderSt] The problems began when homeowners found they could not emerge from the trial period, and ended up in litigation with those who may (or may not still) hold the actual mortgages. Once more, financial institutions holding home mortgage paper are not at all enthusiastic about modifying the terms of the initial mortgages. On March 16, 2011 Congressman Heller voted in favor of bringing H.R. 839, which would eliminate the HAMP program, to the floor of the House. [roll call 181]
Not to put too fine a point to it, but the programs such as the FHA refinancing plan, the Emergency HUD plan, and the HAMP program all run afoul of the banking industry which is doing all it can to eliminate the possibility banks and financial institutions will have to modify any of the highly questionable mortgages spun out during the Housing Bubble.
Now, we need to refer to the third paragraph in Congressman Heller’s statement on home foreclosures: “We need to reestablish a housing market that has long-term stability in which private capital, not the federal government, is the primary source of mortgage financing. Any financial regulatory reform bill in the future should stop taxpayer-funded bailouts, make further reforms to Fannie Mae and Freddie Mac and help address the struggling housing market which is especially problematic in Nevada.”
However much Congressman Heller may have wished to sympathize with the plight of those in Nevada facing the highest foreclosure rate in the nation, his final word on the matter is “Private Capital.” The first sentence is almost risible: Private funding is THE primary source of mortgage financing in this country — is now and ever shall be. The federal government has only been significantly involved as a primary party in the secondary market. The FHA stamp of approval facilitates transactions in the secondary mortgage market, Fannie and Freddie operate in the secondary market. The second sentence is perilously close to non-sequitur. What inflated the housing bubble in the first place, and made the impact of the implosion so expensive at every level, were financial institutions (un-regulated) which made almost in-comprehensively bad business decisions (“creative” new financial products, CDOs squared, cubed, and quadrupled, etc.) which in turn created a situation in which the financial arteries of this country were clogged with their toxic assets. What Congressman Heller is advocating is a return to the Business As Usual de-regulated, unstabilized, and unfettered privatization of the home mortgage market — which is precisely what caused the need for bail-outs in the first place.
Congressman Heller’s position on the issue of home foreclosures is almost enough to bring back the Desert Beacon Sunday Deck Bass.