Connecting with Southern Nevadans is Heller’s biggest challenge

Summer is here, and the home mortgage crisis continues to hang like acrid smoke across the Las Vegas Valley.

In a state that was once dizzy with economic superlatives, we monthly rank worst in the nation in housing foreclosure. In Southern Nevada, no neighborhood is spared as locals continue to buckle under the weight of joblessness and a dreary economy.

That collective misery ensures the issue will loom large with voters in upcoming elections. Where House and Senate candidates stand could mean the difference between looking engaged and electable, or out of touch and expendable.

Does Dean Heller feel your pain?

While the newly appointed U.S. senator from Nevada certainly didn't create the foreclosure crisis, I'm starting to wonder whether he stands on the side of the afflicted. That's the challenge Heller and his fellow conservatives have as they forward their cost-cutting ideology while attempting to maintain their positions of power.

"I care, therefore I cut" might work in Washington, where House Republicans cling to a "cut, cap, and balance" plan that has no chance of succeeding. But I'm not sure it's a smart political position for a candidate facing a competitive election in a state pummeled by recession.

In March, as a member of the House, Heller voted to defund a Federal Housing Administration mortgage loan conversion program that enabled sinking homeowners to convert onerous private loans they couldn't afford to mortgages backed by the FHA. Heller told reporters
that although the program was well intended, it wasn't working for Nevada.

That's not what fellow conservative House Republican Joe Heck thought. He voted to retain funding. Perhaps that's because so many of Heck's constituents in Southern Nevada are fighting foreclosure and watching their neighbors' windows be covered in plywood.

Heller opposed the Neighborhood Stabilization Program, which helps communities maintain foreclosed properties and assists homeowners with things like down payments. In 2010, struggling Nevadans received $43 million in grants from this program.

On his website, Heller tells us where his heart is at on the issue.

He cares deeply, but not enough to turn the wheels of the federal government to roll to the rescue of suffering homeowners.

He observes, "Nevada currently has the unfortunate distinction of leading the nation in foreclosures. One foreclosure can reduce nearby property values and home equity as much as $220,000. The Center for Responsible Lending estimates that roughly one in three households
will see their property values drop by $5,000 on average as mortgages from 2005 and 2006 reset at higher interest rates, and a foreclosure lowers the price of neighboring properties by 0.9 percent on average."

Yes, but what is he going to do about it?

"We need to re-establish a housing market that has long-term stability in which private capital, not the federal government, is the primary source of mortgage financing.

"Any financial regulatory reform bill in the future should stop taxpayer-funded bailouts, make further reforms to Fannie Mae and Freddie Mac and help address the struggling housing market which is especially problematic in Nevada."

In other words, the problem should be left up to the private sector to fix.

Connecting with frustrated Southern Nevadans, who make up more than 70 percent of the state's registered voters, I believe will be Heller's greatest challenge as he works to retain the seat he was handed following the resignation of John Ensign. How he shows his compassion for struggling homeowners after casting such votes is anyone's guess.

It's valid to question whether Democrats threw Nevada homeowners a large enough life preserver in this crisis. It's pretty obvious that they didn't, and some well-meaning programs were lead-footed and inefficient.

But I can think of no morally sound defense for voting to reel in a lifeline that brought $43 million to Nevada to help failing homeowners.

In politics, there's never a good time to look like the enemy of the little guy.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/Smith