Bad Credit Mortgages, Foreclosures to Play Role in 2008 Election

Fallout from the surge in subprime and bad credit mortgages taken out during the housing boom could become a major issue in the 2008 national elections, political analyst Charlie Cook told the National Association of Realtors at advocacy training sessions in D.C., this week.

As many as 10 million loans could go into default over the next 18 months as borrowers run into financial problems when the low-interest introductory period of their loan terms ends and they find they can no longer meet their Realtors.

These Realtors are in Washington to learn about ways to advance issues important to real estate practitioners.

Foreclosed Home Loans on Political Radar

Speaking at a luncheon, Cook said that the number of potential foreclosed loans is so large that problem subprime/exotic/ bad credit mortgages like interest-only home loans could “be a big political issue” while 2008 national campaigns are underway.

“The issue is not on the political radar screen today but it could be in 18 months,” he said.

Cook says the attention could shine the spotlight on mortgage brokers, but real estate practitioners could feel the impact, too, as the issue hits “pretty close to where you live.”

NAR has been calling for adequate consumer education on the risks of nonstandard, adjustable-rate mortgage products for years, and has developed consumer brochures on the matter with the U.S. Department of Housing and Urban Development and the Center for Responsible Lending.