Housing and mortgage issues are surging to the forefront of the Presidential primary campaign and the differences among the three major candidates are huge.

Here's a quick overview of where the candidates stand:

John McCain says he favors beefing up the FHA program, and he supports the Bush administration's private-sector remedies to the foreclosure problem -- efforts like the Hope Now Alliance and the recent Project Lifeline concept that offers distressed borrowers an extra 30 days to work things out with lenders before they lose their homes to foreclosure.

McCain also supports national licensing of mortgage brokers and tougher crackdowns on mortgage fraud and predatory lending.

The really big fireworks over housing are between Hillary Clinton and Barack Obama. Clinton wants to clamp a 90 day moratorium on all foreclosures plus a freeze of subprime adjustable mortgage rates for “at least” five years.

Obama calls that approach “disastrous” because, he says, it would cause lenders to raise rates on all new mortgages or abandon the mortgage market altogether.

But Obama also strongly favors a change in federal bankruptcy laws that lenders say would force them to raise rates as well: He wants to empower bankruptcy judges to reduce borrowers' mortgage debts to lenders -- something the banking industry is now fighting tooth and nail on Capitol Hill.

Obama also wants to create a new writeoff program for lower and middle-income homeowners who don't itemize on their federal taxes. The plan would offer a “universal tax credit” for 10 million borrowers that would save them an estimated average of $500 a year.

All three candidates support efforts to help defaulting subprime borrowers to refinance into more affordable replacement mortgages, such as FHA. But Obama proposes creating a new $10 billion federal “Foreclosure Prevention Fund” that would help people renegotiate loans with their current lenders or to sell their homes.

Not to be outbid, Clinton says that $10 billion just won't do the job, and promises that her version of the fund would be three times the size of Obama's.

A Clinton spokesman was quoted as saying Obama's overall plan “positions him to the right of George Bush” on housing issues.

As you know, we're nonpartisan here at Realty Times. We stick to the facts. So we won't go anywhere near that last bit of red-hot campaign trail rhetoric.

But we will keep you up to date on the presidential politics of real estate as events unfold in the weeks ahead.

Published: February 25, 2008

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.