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Presidential front-runners mostly mum on housing, but policy hints do exist

With 12 states and one territory up for grabs on the Super Tuesday primary, the presidential election has shifted into high gear, but the issue of housing and housing-finance reform has taken a back seat to other issues to date.

The lack of attention to the housing market by the candidates is worth noting, given the housing industry was at the center of the financial collapse that spawned the Great Recession and continues to be a  major driver of the U.S. economy. The next president also will likely have to deal with the future fate of the nation’s major source of liquidity for the housing-finance market: the government-sponsored enterprises Fannie Mae and Freddie Mac, which are now in conservatorship with dwindling capital reserves.

Despite the lack of focus on housing to date in the presidential race, all of the front runners have made comments over the past year offering glimpses of their housing-market philosophies and priorities that are revealing of how they might approach the market if elected president.   

Hillary Clinton

Hillary ClintonIn February, Clinton became the first and, to date, only front runner to publish a housing plan. Clinton’s policy goals address blighted neighborhoods in an effort to revive the economies in struggling areas and tackle poverty. One priority is to address the low homeownership rates among black and Hispanic families. Clinton said she would invest $25 billion to promote sustainable homeownership. Clinton would continue the Obama Administration’s federal initiatives, such as the Neighborhood Stabilization Program, which is overseen by the U.S. Housing and Urban Development and provides grants for communities to get foreclosed properties back on the market. Her plan also calls for providing up to a $10,000 downpayment match for first-time homebuyers who earn less than an area's median income. As for supporting affordable-rental units, Clinton said she will defend the current level of Low Income Housing Tax Credits, which has been the primary tool for propelling development of affordable-apartment units. She said she will provide additional credits in communities where the demand for these credits far exceeds the supply. As for the financial industry, Clinton said she will fight a rollback of the Dodd-Frank Wall Street Reform and Consumer Protection Act and favors expanding its reach. She says she will defend the Consumer Financial Protection Bureau, which was authorized under Dodd-Frank. She also will support policies that expand access to credit, particularly in poorer neighborhoods.

Key quote: “The reason we passed Dodd-Frank is to make it clear that no bank is too big to fail, no executive too big to jail, and we have got to keep faith with the American people. I am sorry that you have made bad decisions, but we are going to have to unwind you and, yes, break you up.”  

— MSNBC’s Morning Joe [February 26, 2016]

Donald Trump

Donald TrumpThe billionaire real estate mogul briefly owned a mortgage company called Trump Mortgage before the credit crisis, but has made few comments about the housing and real estate markets on the campaign trail. Unlike some of his Republican rivals that have lamented the size of the big banks during the debates, Trump has focused his criticism on Obama-era regulations that he says ceded control of the banks to federal regulators and limited access to credit. His revisions to the tax code would keep the deduction on mortgage-debt interest intact.

Key quote:  “We are making it impossible for people to get loans. I have friends that are wonderful business people, and they can’t get loans. I am calling up banks all the time and giving them recommendations, and the regulators are running the banks. …Dodd-Frank is a disaster in so many different ways. One of the reasons our economy is doing horribly … no banker, no matter how big they are or how much they get paid, is controlling their own bank any more, and they are not making loans to people who want to put people to work.”

— Interview on Fox News before the Iowa primary [January 27, 2016]

Bernie Sanders

Bernie SandersSaying that “greed and excessive risk taking” of Wall Street bankers caused the financial crisis, the Vermont senator has called for the breakup of the big banks and an expansion of the Dodd-Frank regulations. Sanders has called for less secrecy at the Federal Reserve and for a cap on interest rates for credit cards. He has not yet revealed his plan for housing and housing finance reforms. During the George W. Bush presidency, Sanders advocated for the creation of an affordable-housing trust fund, and also authored an amendment to a bill that would have introduced funding to provide downpayment assistance to lower-income borrowers. Sanders would raise taxes for high earners, and also limit the home-mortgage interest deduction to the first $300,000 of mortgage debt.

Key quote: “I voted for the Dodd-Frank legislation, but let us not kid ourselves. Dodd-Frank was a modest piece of legislation. Dodd-Frank did not end much of the casino-style gambling that takes place on Wall Street; in fact, much of this reckless action is still going on.”  

— Press conference in Washington, D.C. [May 6, 2015]

Ted Cruz

Ted CruzThe Texas senator has proposed eliminating several federal agencies, including the Internal Revenue Service and the Department of Housing and Urban Development, to scale back the federal government. Cruz was a leading supporter of a bill to eliminate the Consumer Financial Protection Bureau. Cruz also has called for more transparency at the Federal Reserve and signed on to cosponsor a bill known as the "Audit the Fed" bill. In his flat-tax proposal, Cruz has left the mortgage interest deduction untouched. Cruz is a vocal critic of Dodd-Frank and said government regulations on financial institutions have harmed smaller banks and community banks, and also increased the size and reach of the big banks.

Key quote: “Would you bail out the big banks again? Nobody gave you an answer to that. I will give you an answer. Absolutely not. The big banks get bigger under Dodd-Frank, and the community banks go out of business. And the consequence of that is small businesses can’t get small-business loans. One of the reasons we had the financial crash is that throughout the 2000s, we had loose money. We had an asset bubble. It drove up the price of commodities, and in the third quarter of 2008, the Fed tightened the money and crashed those asset prices, which caused a cascading collapse. That is why I am supporting getting back to a rule-based monetary system.” 

— Republican debate hosted by Fox Business Network [ Nov. 10, 2015]

Marco Rubio

Marco RubioThe Florida senator calls for streamlining government and reducing regulations, and he blames Dodd-Frank for expanding the reach of the big banks. He has not spoken extensively about housing issues, however. Rubio has been the only Republican front-runner who has introduced  a higher-education plan designed to address the growing problem of student debt, considered a major barrier for first-time homebuyers in the millennial generation. Rubio’s extensive changes to the tax code would reduce income taxes and also leave the deduction on home-mortgage interest untouched.

Key quote: “In Dodd-Frank, you have actually codified too big to fail. We have actually created a category of systemically important institutions. These banks go around bragging about it. You know what they have been saying to people with a wink and a nod? We are so big, we are so important that if we get in trouble, the government has to bail us out. This is an outrage. We need to repeal Dodd-Frank as soon as possible.”

— Republican debate hosted by Fox Business Network [Nov. 10, 2015]



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