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The Fiscal Times - Cardoza on "Crusade" To Help Struggling Homeowners

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By Jennifer DePaul

Democratic Rep. Dennis Cardoza wants you to know he is angry -- really angry -- about the state of housing in this country, and he holds one politician more responsible above all others: President Obama.

The five-term California House member says he is "infuriated" and feels personally betrayed by the president and his advisers for not doing more to stem the housing foreclosure crisis that has pummeled his Central Valley district and thwarted the economic recovery.

Cardoza, 52, recently announced he is retiring from Congress next year and says his decision partly stems from frustration with the White House and what he terms widespread government ineptitude in handling the housing crisis. "The housing crisis is our economic cancer," Cardoza told The Fiscal Times during a recent interview in his office. "Until we fix that, cure that ailment, provide the right chemotherapy or radiation, we are not going to get out of the economic crisis that we are in. The president has been putting Band-Aids on the housing market instead of fixing the root cause."

Obama early in his administration pledged $50 billion to boost the crippled housing market and help as many as 9 million homeowners obtain more affordable mortgage terms. Three years later, the government has spent only $2.6 billion of those funds, according to the Treasury Department. Cardoza complained that Obama broke his word by not keeping housing at the forefront of his agenda to jumpstart the economy. "I'm sorry, but you are President of the damn United States of America," Cardoza said of Obama's policies. "You have to do what is right for the country and not worry about the political ramifications. I don't know how this president got so off kilter with the message. He did such a good job in the last election and he has been so tone deaf since."

A Treasury spokesperson said late last week that while the program funds are still available, their use is restricted by the Dodd-Frank financial reforms. But one of the Administration's signature programs--Home Affordable Modification Program (HAMP) --has offered loan modification assistance to 5 million homeowners. And there are at least 1 million more homeowners eligible to participate in the program. The Treasury Department has teamed up with the Department of Housing and Urban Development (HUD) to reach out to eligible homeowners through public service announcements and sponsor homeowner events around the country.

Cardoza, a former California state assemblyman and realtor, first gained notoriety by winning the congressional seat of former Democratic Rep. Gary Condit, who admitted having had an affair with an intern, Chandra Levy, found murdered in Washington's Rock Creek Park in 2001. (Condit was cleared of any involvement, and another man was eventually convicted of the killing.) Shortly after coming to Washington, Cardoza established his independence from the Democratic Party by joining the Blue Dog coalition in 2003.

His 18th congressional district, dominated by flat farmland, saw a spillover from a population and building boom in the San Francisco Bay Area. But then came the housing bust, and Stockton, one of the district's largest cities (pop. 260,000), was hit hard, suffering a higher foreclosure rate than any other municipality in the country. Nearly 70 percent of the homes in Cardoza's district are "underwater," or worth less than their mortgages, and nearly 30 percent of homeowners have been foreclosed upon.

Since the housing crash began in 2007, Cardoza has been on a crusade to help struggling homeowners but has often found it hard to be heard. He introduced the Housing Opportunity and Mortgage Equity Act (HOME) several months after Obama won the 2008 election and says he had the measure "waiting on Obama's desk when he came to office." That bill was designed to allow all homeowners, regardless of their equity status, to take advantage of low interest rates. It would have used the federal government's conservatorship and the backing of Fannie Mae and Freddie Mac mortgages to secure the current low market rates for longer 40-year fixed terms. Cardoza contended it would help 30 million struggling homeowners.

Cardoza's bill was largely ignored by the Obama White House and congressional leaders, and he re-introduced it in the fall of 2010 with 34 co-sponsors. Once again, the bill was pushed to the side and has received little attention amid numerous battles over budget and economic policies.

Cardoza tries to meet with members of the Obama Administration regularly to talk about what can be done with the housing crisis, but he says his efforts have largely fallen on deaf ears. In early October, he met with Edward DeMarco, director of the Federal Housing Finance Agency (FHFA), and DeMarco conceded that he had never met with a person who had been foreclosed upon, Cardoza says. "These people don't live in the real world," Cardoza says. "They don't see the pain in people's faces. It's just an absolute outrage."

Just before the health-care vote in March 2010, Cardoza requested a meeting with Obama to talk about the housing crisis. He asked the president to take a firsthand look at how his district had been crippled by the housing crisis and water shortages. The president gave Cardoza his word that on his next California trip he would visit the district. "After the third or fourth trip, I said an appearance on the Jay Leno show does not constitute a fact-finding mission to my district," Cardoza recalls.

Cardoza is far from alone in his outrage. Morris Davis, academic director at the James A. Graaskamp Center for Real Estate at the University of Wisconsin-Madison, says he has given up trying to work on housing proposals with the Administration. Three years ago Davis and some members of Congress, including Cardoza, gathered research about how to stop foreclosures, but he says the group could not get attention. "We were yelling at the top of our lungs," Davis says. "I felt like Chicken Little."

Last month, Obama introduced a plan dubbed HARP 2.0, a revised version of the Home Affordable Refinance Program, intended to help owners of underwater homes refinance their mortgages at lower interest rates. Of the 11 million homes that are underwater, fewer than 900,000 have opted to get help through the program since it was rolled out in 2009 -- falling far short of its goal of several million. This month, Congress and President Obama signed a new law that would increase the size of a mortgage that borrowers can obtain from the Federal Housing Administration.

Although he would like to see his bill passed, Cardoza is not optimistic that anything significant from Congress or the White House can be done to boost the battered housing market before the 2012 presidential election. The recent collapse of the congressional Super Committee over deep ideological divides further underscores that point and has poisoned the water for Republicans and Democrats to come together on any measure. "If the President isn't willing to lead on thisÂ…ultimately his re-election chances will be jeopardized," Cardoza says.


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