The real estate blog.

You know the old adage, “give a man a fish and he’ll eat for a day - teach a man to fish and he’ll eat for a lifetime?” As cliched it is, that’s the best way I can describe the politician’s plans to solve the housing crisis. Yes, it’s a crisis. With all the various components of housing failing - foreclosures, mortgages, overextended lenders, I’m convinced this is a crisis.

Today, the Secretary of Treasury went to bat for the interest rate freeze that will help a small portion of homeowners facing foreclosure -

Treasury Secretary Henry Paulson used a speech Monday to defend a plan brokered by the Bush administration to “freeze” mortgage rates for some subprime borrowers and also to call on Congress to pass legislation to head off a housing crisis.

Meanwhile, President Bush denied an economic crisis, citing mixed indicators -

President Bush said Monday that economic indicators are “increasingly mixed,” causing anxiety for many Americans. But he said the economy is resilient and the U.S. has dealt with anxiety before.

The Democratic contenders, Clinton, Edwards and Obama have come up with their own plans to deal with housing. Clinton and Edwards favor rate freezes, buying time for struggling homeowners to get out of high mortgage payments. All of these tactics for dealing with the crisis are like giving away fish. Only Obama is willing to go after the problem - fraud.

I’m not just talking about criminal activity, I’m talking about the “minor” fraud like bait and switch advertising, inflated incomes on stated loans and the “little lies” loan officers and real estate agents tell clients from time to time. All mortgage fraud involves a real estate professional and all mortgage fraud can be prevented by the same people. Think about it. A real estate transaction involves three different entities, real estate agents, loan agents and title agents. There should be checks and balances in each step. Instead, affiliated business relationships develop that cloud instead of clear up the transaction. This takes place all in the name of increased profits.

Barack Obama wants to stop this and I think he’s headed in the right direction -

Obama will crack down on fraudulent brokers and lenders. He will also make sure homebuyers have honest and complete information about their mortgage options, and he will give a tax credit to all middle-class homeowners.

I’d like to see more details on this plan, but I do think his intentions are closest to addressing the source of the problem. He’ll teach that man to fish indeed.