Mortgage woes fodder for campaign attack in Henderson

A Henderson city councilwoman who has defaulted on her home mortgage is taking criticism from a political opponent who contends her financial problems show she is ill-suited to handle the public's money.

Tom Wagner, a City Council candidate, sent a mailer this week bashing one-term incumbent Gerri Schroder for not making a house payment in six months.

It's common for candidates to use their rivals' financial troubles against them, but it does appear to be a new campaign twist to slam an opponent for falling behind on a home loan in the bad economy, a situation in which tens of thousands of Nevadans are mired.

Schroder and Wagner are among five candidates vying for the nonpartisan Ward 1 seat to represent eastern Henderson. If no one gets more than 50 percent of the vote in Tuesday's primary, the top two finishers will square off in the June 7 general election.

In the mailer, Wagner lays out in detail the notice of default that Schroder recently received. Wagner contends Schroder and her husband both have jobs and should not renege on their financial obligations.

"Do you honor your commitments?" the flier states. "Most hardworking men and women do."

Schroder called Wagner's criticisms "a personal attack on my family."

They are among the countless people ensnared in bad economic circumstances, she said. "It's ridiculous. If he's saying that about me, he's saying that about everybody who's going through this."

Her financial hardship has little to do with her day-to-day duties as a councilwoman, such as resolving neighborhood disputes, she said. On the city's budget matters, she defers to the finance director and other experts, she added.

HOW IT HAPPENED

Schroder said she fell behind on her $1,600-per-month house payments last year after her husband had an extended period of unemployment. He lost his job as a warehouse manager for System Supplies in August 2009 when the company went under, she said.

His jobless benefits ran out in March 2010, leaving them with nothing but her $42,000 salary as councilwoman to support their family, she said. He since has gotten a job installing campaign signs, but it's seasonal work that pays a fraction of what his old job did, she said.

They are working on loan modification with the bank, which has suspended foreclosure proceedings, Schroder said. They are current on all their other bills, she said.

Wagner argues that he is raising a legitimate issue.

"I don't think it's negative on our part," Wagner said. "It's informing the public. When you're an elected official and you're responsible for the government's money, you're fiscally responsible for your home."

The Schroders bought their home in 1999 for about $135,000 and refinanced it in 2005 for $168,000, Wagner said. So they are different from the families who bought houses during the overheated boom and wound up underwater on their mortgages when the market collapsed, he said.

Wagner said he took a second mortgage on the Henderson house he moved out of after his divorce and is finding a way to pay it.

Nevada led the nation most of last year in foreclosure activity. In 2010, there were about 165,000 foreclosure filings and almost 35,000 foreclosure sales in the state.

NEW CAMPAIGN APPROACH

A political analyst said he couldn't recall a candidate assailing another for teetering on foreclosure.

Given the prolonged recession and depressed housing market, it was bound to happen, said David Damore, political science professor at the University of Nevada, Las Vegas.

In municipal races, which lack juicy issues, a challenger is more apt to dig up personal dirt to discredit an incumbent, Damore said. But Wagner's tactic could backfire because so many people are struggling to stay in their homes, he said.

"A lot of people are going to empathize with her," Damore said.

Still, Wagner is turning Schroder's slogan against her, in which she declares, "Honesty and integrity do matter."

Wagner's mailer is the latest volley in what is becoming a heated skirmish. Schroder recently mailed fliers calling Wagner a "carpetbagger" because he moved into Ward 1 in January, just in time to enter the race against her.

In that mailer, she contends that he and Clark County Commissioner Steve Sisolak seek to consolidate police and fire services in the entire valley, a move she argues would put the public at risk.

Both Wagner and Sisolak say that her statement is false and that they oppose merging the services.

Wagner said he began leasing a house in Ward 1 after he divorced.

He moved out of the house he owned in north Henderson because he didn't need a place that big, he said. He rented it to two men.

But Schroder questioned Wagner's timing and stood firm on labeling him a carpetbagger. His latest attack shows he cares more about trying to win than serving the area where she has lived for 20 years, she said.

"It really has nothing to do with the issues in the city of Henderson," Schroder said.

Contact reporter Scott Wyland at swyland@reviewjournal.com or 702-455-4519.