Miami Three weeks before the election, anger over tainted home foreclosure documents is bursting into the battle for control of Congress, especially in hard-hit states such as Nevada and Florida. Democrats in tight races in the worst housing markets are pressing for a national moratorium, putting a reluctant White House on the spot.
Leading the call for a nationwide time-out on kicking people out of their homes is Democratic Senate Majority Leader Harry Reid, who is locked in a neck-and-neck re-election contest with tea party-endorsed Sharron Angle in Nevada, which has the highest foreclose rate in the country. Reid is decrying “reports of shoddy and defective affidavit preparation.”
On Wednesday, attorneys general and bank regulators in all 50 states announced a joint investigation into questionable foreclosure practices, including forged documents, apparently bogus signatures and questionable notarizations. U.S. Attorney General Eric Holder has said the Justice Department also is looking into the allegations — but he stopped short of opening a formal investigation.
While the allegations have suddenly become part of the political dialogue in a volatile election season, politicians are all over the map on the issue, some fearing that direct government action could snuff out a fragile recovery. Some candidates appear to be ducking the issue entirely, leery or unsure how to address it.
Tea party activists and many mainstream conservatives strongly oppose any additional government intervention in the nation’s economy, including a foreclosure moratorium. “You’re going to shut down the housing industry. People have to take responsibility for themselves,” said No. 2 House Republican Eric Cantor of Virginia.
For President Barack Obama, it’s a dicey issue.
The White House doesn’t want to be seen as acting to shield banks, which have been a frequent target for both parties. Wednesday’s announcement by JPMorgan Chase & Co. that its profits jumped 23 percent in the July-September quarter — while much of the economy still struggles — won’t win the industry any new fans.
But the administration also doesn’t want to spook fragile housing and financial markets. “There are a series of unintended consequences to a broader moratorium,” said White House spokesman Robert Gibbs.
Other notable business news:
• By unlocking decades’ worth of natural-gas deposits deep underground across the United States, drillers have ensured that natural gas will be cheap and plentiful for the foreseeable future. It’s a reversal from a few years ago that is transforming the energy industry. The sudden abundance of natural gas has been a boon to homeowners who use it for heat, local economies in gas-rich regions, manufacturers that use it to power factories and companies that rely on it as a raw material for plastic, carpet and other everyday products. But it has upended the ambitious growth plans of companies that produce power from wind, nuclear energy and coal.