Romney and the HUD/FHA Shut Down, Part II

Election time is like the Wild West: anything can, and will, happen. Yesterday our page views went through the roof when we blogged about GOP hopeful Mitt Romney floating the idea of getting rid of HUD. So far, Romney hasn’t backed down from the idea (that we know of), but professionals who are serious about this industry know full well that killing HUD at this point in the recovery would cause housing to crater yet again. Mike Anderson, the former legislative chair at the National Association of Mortgage Bankers, posted an item on his Facebook page the other day saying, “We have to make sure this does not happen.” Romney is an investment banker as much as he is a politician and I would assume that he’d have his people analyze HUD, and then conclude that shutting down the agency (and FHA) is an unbelievably damaging idea. Of course there are two types of investment bankers (PE firms) out there: those who actually like to build things, and those whose mission is to squeeze every nickel out of an existing business and flip it within three to five years. The latter is a corrosive type of value destruction that hurts businesses, destroys morale, and lets good people go because they need “to make their numbers.” The bottom line is this: Growth is good, value destruction is not. In the long term, what goes around comes around.