Mitt Romney's Shifting Stance On Troubled Mortgages

Mitt Romney has apparently abandoned his earlier belief that the government should stand back and allow foreclosures to happen as quickly as possible so the housing market can bottom out. And his latest plan for staving off foreclosures is indistinguishable from the Obama administration's.

"We need those banks to be willing to renegotiate with people who are underwater in their homes to make sure people can stay in their homes," Romney said Saturday at a campaign event in Dayton, Ohio. "If you have someone who has an income and can meet payments that are a little lower than their current mortgage, then work with them, renegotiate, don't put the home into foreclosure if those people are able to stay in the home and meet those obligations."

But last year Romney had struck a different tone when he said the government shouldn't interfere in the housing realm. "Don't try to stop the foreclosure process. Let it run its course and hit the bottom," he told the Las Vegas Review-Journal last fall.

On Saturday Romney blamed banks' unwillingness to modify mortgages on the Wall Street reform bill that Congress passed in 2010. "That's something which a lot of small banks don't feel they can do because they're frightened with Dodd-Frank, and they're frightened whether the regulators, or the inspectors, are going to come in and punish them for having renegotiated those loans."

American Banker, a trade publication for the banking industry, registered skepticism about Romney's claim that the new legislation is interfering with mortgage modifications.

"Of the many criticisms that Republicans have made of the Dodd-Frank Act, the idea that the 2010 law is discouraging banks from modifying mortgages is a new one," wrote American Banker's Kevin Wack on Monday. "Romney did not explain why Dodd-Frank is to blame. He also did not point out that the Obama administration makes incentive payments to banks that grant modifications."

The plan Romney has outlined for housing -- encouraging banks to modify mortgages for struggling borrowers willing and able to make slightly lower mortgage payments -- is exactly the strategy pursued by the Obama administration since 2009. The Home Affordable Modification Program pays banks to reduce mortgage payments for borrowers who are falling behind on their mortgages or at risk for doing so.

The program has fallen far short of expectations as fewer than 1 million borrowers have received permanent modifications. President Obama had promised in 2009 that the program would reach 3 to 4 million borrowers. Tales of banks losing paperwork and stringing borrowers along are legion, but banks were much more likely to drag out modifications in the early days of the program -- before the passage of Dodd-Frank. The Obama administration has said that many more homeowners will receive help, thanks to a recent $25 billion settlement between the government and the five largest banks.

The Romney campaign did not immediately respond to a request for comment about his housing policies from HuffPost.

Romney first softened his housing stance ahead of the Florida primary in January, when he met with struggling homeowners.

"You have to help people get flexibility from banks," Romney said during a Florida debate. "Right now with Dodd-Frank we made it harder for banks to renegotiate mortgages to help people get out."

Romney's remarks on foreclosure start around minute 45 in the below C-SPAN video.

testPromoTitleReplace testPromoDekReplace Join HuffPost Today! No thanks.