Given the lack of discussion of housing-related issues in this presidential election, we’ve taken it upon ourselves to score each of the candidates’ positions on housing. Here is our take on Mitt Romney’s stances. The counterpart to this piece addresses our view of President Obama’s record, and can be viewed here.

With President Obama, we have the benefit of an actual record on housing. But with Governor Romney, we’ll have to rely more on his proposed policies versus actual record. The fullest articulation of his housing policies can be found on his campaign website. His few recent remarks on housing on the campaign trail generally mirror themes spelled out on the website, with the exception of comments Romney made last year to a newspaper editorial board which will be addressed below.

The campaign website makes a number of claims about housing and the Obama record, then outlines a four-point plan to fix housing.

Romney’s Claims about Housing

It’s all about the economy

Romney asserts that a more robust overall economic recovery is essential to a housing recovery, a point on which most economists – and the President, too – would likely agree. Romney raises the issue, of course, in order to emphasize his broader critique of President Obama’s handling of the economy.

Wrapped up in this issue is the question of which affects the other: housing or the economy? Of course they are interrelated but, historically, the housing sector has played an important role in pulling the broader economy out of recession. That has decidedly not happened this time around.

Home prices have fallen under Obama

Yes, they have. National home values in September were down about 20 percent from their peak in May 2007 (excluding foreclosure re-sales). They fell 13 percent between that peak and the end of George W. Bush’s second term, and fell another 10 percent between January 2009 (when Obama took office) and October 2011 (when they reached their post-bubble low). They have since risen 3 percent, for a total decline to date for the Obama era of 7 percent. It is my belief that enormous home value declines (and associated negative equity and foreclosures) were inescapable by the time wildly inflated national home values reached their zenith in 2007 (2006 for many of the larger metro markets). Those interested in a lengthier discussion of the culpability of Obama for this decline can click here.

Tight credit is attributable to uncertainty created by the President’s policies

While it’s true there are lots of mortgage-related details to be worked out in the Dodd-Frank financial reform legislation, most of these details involve the future handling of mortgages, not mortgages currently being originated and securitized. Far and away the biggest factors behind tight credit conditions have been 1) the fact that home values have been falling and lenders get very picky when credit is secured by a depreciating asset; 2) the fact that these home value declines have produced high default rates, which have sapped bank reserves; and 3) the end of private-label mortgage securitization, which channeled even more money into the mortgage market.

These factors can only be laid at the President’s feet if you believe home value declines could have been prevented after they were inflated to bubble levels (I don’t); or that mortgage defaults in the face of enormous negative equity could have been prevented (very hard to see how they could be substantially reduced, and so it becomes incumbent on Romney to identify a plan for doing so); or you feel investors could have been enticed back into the mortgage market during the housing recession without a government guarantee (again, not strictly impossible, but a very, very tall hurdle).

Taxpayers are on the hook for 90 percent of new mortgages

This is a true statement of fact when considering loans guaranteed by Fannie Mae and Freddie Mac (both under government conservatorship), the Federal Housing Administration, Veterans Administration and other smaller government entities. I assume Romney is not in favor of reducing access to credit made available by these entities, but rather is decrying the lack of private capital not guaranteed by the government. As noted previously, private credit without a government backstop is a tall order in a declining market where private firms have already lost so much, so Romney will need to be more specific about what he believes could have brought such private capital back into the market.

President Obama has not reformed Fannie and Freddie

No, he has not. I personally believe that while reform of these entities is essential, this reform should not have taken place before home values stabilized – which they did only in late 2011. To have done so earlier would have created distinctly more uncertainty in mortgage markets, thereby further tightening credit availability. Ironically, the creation of market uncertainty is one of Romney’s knocks against Obama. Trying to replace Fannie and Freddie while they and the FHA were the only game in town and home values were still falling would have been exceedingly dangerous. Hopefully, a serious debate about the future structure of mortgage financing will occur after the election, and we can outline a smooth, multi-year transition to a new framework that does not privatize gains while collectivizing risks. But it does seem inconsistent to decry the lack of mortgage credit in recent years, while simultaneously calling for the overhaul of the very system providing what mortgage credit has been available after the exit of private, non-guaranteed mortgage credit from the playing field.

Romney’s Plan to Fix Housing

Responsibly sell the 200,000 vacant homes owned by the government

It’s hard to argue against this idea, but it’s also an area of intense focus for the Obama administration, too. As of August, real estate owned (REO) inventory held by Fannie, Freddie and the FHA was down 18 percent from the prior year and 31 percent from late-2010 peak levels. The administration has moved forward with bulk sales of REO stock in an effort to get large pools of private capital deployed to mop up distressed inventory. The FHA has also been working to increase single-family loan sales, in which they sell the mortgage notes of defaulted mortgagees to private investors instead of foreclosing on the mortgagees and selling vacant homes (which I think is a great idea).

More specifics about how Romney believes REOs can be more efficiently disposed of would be helpful here, as there is already unanimous agreement on the goal itself.

Facilitate foreclosure alternatives for those who cannot afford to pay their mortgages

This element of Romney’s plan does seem to suggest a change in approach over the past year. Last October, in an interview with the Las Vegas Review Journal’s editorial board, Romney said: “As to what to do for the housing industry specifically, and are there things that you can do to encourage housing: One is, don’t try to stop the foreclosure process. Let it run its course and hit the bottom.”

Contrast this earlier statement with the current language from the campaign website: “Mitt Romney will facilitate creative alternatives to foreclosure for those who cannot afford to pay their mortgage.”

In moving from a hands-off policy with respect to foreclosures to one that is more open to some assistance to homeowners facing foreclosure, Romney moves closer to, not farther from, Obama’s position. In general, the essence of Romney’s initial response in Las Vegas last year is correct – the housing correction needed to run its course, and policy would not be able to triumph over market fundamentals. I believe Obama has not significantly interfered with the market correction, but did attempt to find ways to help homeowners for whom some modest help from the government would change the outcome for that family. It seems apparent to me that Romney has also arrived at a similar position.

With both candidates agreed on the desirability of finding alternatives to foreclosure where practical, Romney could still wage battle with Obama on the substance of foreclosure alternatives being proposed. But, again, Romney is silent on what new alternatives he might offer.

Replace complex rules with smart regulation in order to get lending flowing again

Here, it seems clear that Romney is taking aim at the Dodd-Frank financial reform legislation. As noted earlier, laying current tight lending standards entirely (or even mostly) at the feet of Dodd-Frank seems a bit of a stretch. There are elements of Dodd-Frank which are complex (can anyone say “Qualified Residential Mortgages?”), but this seems to be more a result of the complexity of a hybrid mortgage system with private capital backed by some form of government guarantee.

Again, it is possible Romney has a plan that is radically more straightforward than Dodd-Frank, but still prevents some of the bad behavior we saw during the housing bubble. But it is, of course, incumbent on him to outline such a plan.

Reform Fannie and Freddie

Here, Romney seems to be in agreement again, at a high level, with Obama. In fact, the Obama administration actually outlined three alternatives to Fannie and Freddie last year. This leaves any gap between the two candidates positions focused on timing (and I don’t think it would have been responsible to have reformed them before now) or details (which Romney hasn’t spelled out at all, and Obama has only spelled out in very high-level details).

In conclusion, Romney’s housing plan seems very similar to the approach taken by Obama. Undoubtedly, this similarity is why we’ve heard so little about housing during the election campaign. The fact that Obama’s approach to housing has been relatively centrist has left Romney little space to differentiate his own policies which still staying within the range of politically acceptable, moderate alternatives. This has left Romney with the fallback strategy of staying moderate but generally vague, thus allowing him to critique Obama without having to say how he would have done better.