Welcome to the front lines of the housing crisis. Florida and three of the next states to vote in the GOP presidential contest are among the 10 worst foreclosure states in the nation. And there’s not much light at the end of the tunnel: The four states have the highest percentage of homeowners who owe more on their mortgages than their homes are worth.
- Nevada, which votes Feb. 4, had the worst foreclosure rate in the country in 2011, for the fifth straight year, with 6 percent of its houses in foreclosure. Almost six in 10 homeowners are “underwater” on their mortgages.
- Arizona and Michigan vote Feb. 28. Arizona had the nation’s second highest foreclosure rate, at 4.1 percent, and Michigan was 2.2 percent. Underwater rates were 47 percent and 35 percent, respectively.
- Florida’s foreclosure rate was just over 2 percent. Underwater homeowners made up 44 percent of mortgages. Its primary is Jan. 31.
A University of Maryland study estimated a quarter of people in mortgage default or foreclosure are over 50.
Distressed homeowners don’t make for happy campaign chatter. But they provide a backdrop for political points the candidates want to make.
In Monday night’s debate, Mitt Romney said troubled homeowners should get more flexibility from their banks. But he said, “You’re not going to get housing recovered unless you get jobs created again.” Just a few months ago, Romney had taken a harsher line: “Don’t try to stop the foreclosure process. Let it run its course and hit the bottom.”
Newt Gingrich is being battered by the other candidates for being paid $1.6 million by Freddie Mac, the scandal-ridden government mortgage giant. Which led to a Romney-sponsored ad in Florida that intones, “While Florida families lost everything in the housing crisis, Newt Gingrich cashed in.”
Rick Santorum suggested a temporary fix, letting homeowners deduct losses from the sale of their underwater homes. “It’s important temporarily to give people the freedom to get out from under these homes they’re holding onto.”