The Real Deal New York

Romney’s economic aide backs Obama’s mortgage refinance plan

August 07, 2012 10:00AM

Mitt Romney’s stance on mortgage refinancing proposals will pit his Republican colleagues against one of his top economic advisers. A controversial mortgage policy proposed by the Obama administration that would accelerate the amortization of underwater loans has gained the support of Columbia Business School Dean Glenn Hubbard, Romney’s adviser, but drawn criticism from Republicans, the Wall Street Journal noted.

The program, officially introduced by Oregon Senator Jeff Merkley, calls for Fannie Mae and Freddie Mac to pay the closing costs for underwater homeowners to refinance into short-term loans. That fix is part of a third-round of adjustments to the Home Affordable Refinance Program that Hubbard has criticized in the past for not going far enough. In fact, Hubbard has been calling for more widespread refinancing of loans since late 2008, according to the Journal.

But Romney has not disclosed his stance on any of the fixes to HARP, which also include tweaks to adjust for the FHFA’s rejection of some technical changes implemented in the last round of fixes and a third proposal that Hubbard does not support. A vote is slated for September. Meanwhile, Romney’s take on the foreclosure crisis has been murky, saying last fall that he believes in a laissez-fare approach, only to reverse course in January, saying that a “much more concerted effort” is needed. [WSJ]