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» VISIT US ONLINE @ DSNEWS.COM COVER STORY happening, but can the recovery last under a house divided? recovery and some even say it's Everyone wants a housing W on housing policies, and Republicans and Democrats in Congress openly and unapologetically epitomize that division. an idea of what he would favor in a second term. Romney's policy views, not just on housing, are more difficult to parse, but he's said enough in public appearances on the campaign trail to fill in some of the blanks. When asked specifically about Romney's Obama's track record as president provides views on housing, there was nary a mention of any of the market's ailments in the response from Amanda Henneberg, a spokesperson for the Republican candidate's campaign—no reference to foreclosure backlogs, negative equity, the lack of residential investment, or a secondary market financing machine fully controlled by the government. "Governor Romney believes the best thing for the housing market is a robust economy. And the best way to achieve a robust and thriving economy is to defeat President Obama this November," Henneberg said. According to Karen Dynan, a senior fellow at the Brookings Institution, the policy views of both Romney and Obama are often difficult to detect. "Nailing down specifics is really hard," she said. One area where either a Republican or Democratic president may find some bipartisan agreement from Congress, Dynan notes, is tax reform, especially on items that can lower tax rates but increase tax revenue—that makes the mortgage interest tax deduction a likely target. While it's doubtful the next president and hen voters choose the next president, they may also decide the fate of the housing industry. Gov. Mitt Romney and President Barack Obama offer often polar-opposite views several news outlets overheard him saying, "I'm going to probably eliminate for high-income people the second-home mortgage deduction." GSE reform is undoubtedly a critical area for the next-term president, but neither candidate has put forth any meaningful details on how they would proceed with overhauling the housing finance system—probably because they see too much political risk in coming out with a plan before the election, according to Dynan. She contends the GSEs helped feed the Congress would advocate for a full repeal of the deduction, they might agree on a progressive proposal that increases revenues from more wealthy taxpayers, such as capping the deduction for homes over a certain value or for vacation homes, Dynan speculates. Obama floated the idea of cutting the mortgage interest deduction in a 2011 deficit reduction plan. Romney's campaign hasn't unveiled any proposed actions related to the mortgage interest line of the tax code, but at a private fundraiser in April, reporters from mortgage crisis, and without reform, she says it will be almost impossible to get the private sector to commit capital again. Dynan notes that uncertainty regarding financial policy in the housing and mortgage sectors looms large over private-label investment. If banks and other potential lenders don't know what the GSE landscape will look like over the next two or three years, she says, then they can't make plans for their own businesses. The Obama administration presented a white paper in February 2011 that spelled out several options for GSE reform. But Dynan says many observers found the paper insufficient because it didn't provide much detail and it didn't commit the administration to a plan. During the same April fundraiser where Romney unwittingly divulged his inclination to 71

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