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To: i-node who wrote (437975)12/4/2008 1:51:34 AM
From: tejek1 Recommendation  Read Replies (1) | Respond to of 1586105
 
How To Right The GOP

nationaljournal.com

Two Top Republican Strategists Offer Their Advice To Get The Party Back On Track

by Charlie Cook

Tuesday, Dec. 2, 2008

The single most important factor that determines where American politics will go over the next two years is how President-elect Barack Obama fares in office. If he makes more than a few strategic or tactical miscues, his honeymoon will be abbreviated and Republicans will have the opportunity to bounce back from two consecutive disastrous elections. If the Obama administration does well, things obviously won't look so good for the GOP.

A key question to consider is whether Republicans can quickly address the fundamental problems facing their party, or whether they ignore or misdiagnose their problems and wait for Democrats to self-destruct. In several conversations with some of the smartest Republican pollsters and strategists, it's clear that many have a good fix on the problems of their party. However, there is considerable concern that many elected officials and constituent groups within the GOP are reluctant to hear the advice these consultants feel they need.

I have offered several top Republican consultants the opportunity to speak candidly, and without attribution, to their party's elected officials. Here are the views of two, with over 50 years of professional campaign experience between them, edited only for clarity:

"The temptation among Republicans will be to blame this on a variety of factors that are temporary in nature and will go away. By concluding this, it will not force them to rethink how Republicans are perceived and as a result they will conclude they do not need to change.

"For instance, they will blame this election on George Bush. They're not entirely wrong about this of course, but the fact of the matter is that post-election surveys show more voters who chose Obama were voting against John McCain than were voting against Bush.

"They will also blame this election on the economy. In this too, they're not entirely wrong, and certainly as the Dow went crashing in September, McCain's numbers came down as well. But I really think this election was much more generically about change than it was specifically about the economy.

"The key conclusion is that the desire for change is driven much more by damage to the Republican brand than by anything else, including the president. I think there are a number of reasons for this (in addition to Bush fatigue and the war). To me, these are the two big ones: first, deep disappointment in Congress and with individual members. This is driven in part by the corruption scandals, in part by profligate spending and in part by Republicans' failure to address the problems people are really concerned about.

"Second, the shallowness of our policies. Republicans are a whole lot better at being against things than at being for things. That's a problem if you're in the majority. On topics that the center really cares about, such as education and health care, we do one of two things. We either avoid them like the plague and are scared to talk about them or, if we say anything at all, it is to propose a tax cut or a tax credit.

"The Republican coalition has been a three legged stool: social conservatives, defense hawks and fiscal conservatives. With regard to social conservatives, there is nothing to suggest we're losing ground here. They showed up in the same numbers as before and voted only slightly less Republican than they used to. With regard to defense hawks, the issues of the war in Iraq and terrorism have disappeared. They were not quite, but almost, irrelevant on Election Day.

"With regard to fiscal conservatism, taxes and spending have declined as concerns and we've hurt the party brand. Moreover, Republicans have never understood the difference between being punished for a tax increase and rewarded for a tax cut. The first hurts, and the second does not help.

"Many Republican commentators point out that, even though we lost, this is still a center-right country. It seems to me that statement misses the point. People have changed, although they have not changed the labels they use. There are clearly more people now who want government to address the problems they have to deal with than used to think so in the past. Conversely, there are fewer people now who do not want government involved.

"This goes to the long-term trend of Republican losses in the suburbs. This is a trend that has been more than 20 years in the making and seems to be moving from the Northeast in a westerly direction. It's no longer just New Jersey and the Philly suburbs, but also the Denver suburbs, Maricopa County, Clark County, Orange County, etc. To me, the core reason we're losing them is that, as Republicans, we're not promising to fix the problems they're concerned about, including health care, education and retirement.

"So when I hear people say it is still a center-right country and that we need to return to our conservative roots, I think that is a long-term strategy to do nothing and a strategy that will keep us in a permanent minority. Here is another point from the post-election data: People really don't want to pay higher taxes. So, on the one hand, they want to have government address their problems and on the other hand they don't want to pay for it.

"This should be our niche: find solutions to problems like education and health care that spend government funds more efficiently, without spending more. That sounds much more like a winning strategy to me."

A second, equally experienced Republican pollster put his four tough-love suggestions like this:

"First, walk the walk on the ethics stuff. Larry Craig, Mark Foley, Ted Stevens, Vito Fossella -- these guys seem to think they are entitled. We ought to be the ones cleaning house.

"Second, Republicans ought to be the ones really starting to get creative on the energy issue. We ought to be putting our best thinking into coming up with strategies and new ideas on this issue. It isn't going away, and we have to get out in front on it.

"Third, focus on regaining our advantage on technology. We had our heads handed to us on the Internet campaign, e-campaigning, etc. We need to focus on developing new technological methodologies for communicating with voters.

"Fourth, stop being [misguided] on immigration. We are alienating huge parts of the electorate, we are turning our primaries into single issue 'hate' contests and ignoring the single fastest growing bloc of voters in the country."

There will be several more of these, offered to Republicans as food for thought. For Democrats, it's a little glimpse into how some of the best Republican minds are diagnosing their own party's problems.



To: i-node who wrote (437975)12/4/2008 1:58:11 AM
From: tejek  Respond to of 1586105
 
A Rush Into Refinancing as Mortgage Rates Fall

By TARA SIEGEL BERNARD
Published: December 3, 2008

The housing market may finally be getting some relief, with lower mortgage rates already encouraging refinancing and Treasury officials considering ways to entice new buyers.

The Lattanzios are not alone in seeing an opportunity: one index of refinancing activity tripled last week. Last week, the Federal Reserve announced that it would buy $500 billion in mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Mortgage rates immediately dropped, and that led to a surge in mortgage refinancing activity for the week — even with the Thanksgiving holiday.

On Wednesday, people close to the discussions said that the Treasury had been talking with Fannie Mae and Freddie Mac about ways to drive down mortgage rates to as low as 4.5 percent. That rate is about a percentage point lower than the going rates for such loans.

Any government efforts to jump-start the housing market have a number of obstacles, the biggest being borrowers’ worries that the economic downturn will affect them. Meanwhile the best interest rates will go only to borrowers in sound financial shape. And even if the efforts go as planned, they may not help the most distressed homeowners.

Still, the jump in refinancing activity showed that there was an appetite that could be whetted by lower rates. The Mortgage Bankers Association said its refinance index, which measures refinancing activity, tripled to 3,802.8 last week from the week before. The index was also 37.7 percent higher than in the same week a year ago. It was the largest increase in refinance applications in the survey’s 18-year history, though it does not measure how many applications become loans.

Refinancing activity accounted for 69.1 percent of all mortgage applications submitted last week, up from 49.3 percent the week before.

“We did quadruple our normal volume last week,” said Bob Walters, chief economist of Quicken Loans. “We had loan officers staying past midnight to get back to all of the people that had been calling. There is still a silent majority of people who can refinance and qualify.”

Callers cited a variety of reasons for their new interest in refinancing, mortgage lenders said. But the main reason was that they wanted to lock in a lower mortgage rate and reduce their monthly costs in case they fell victim to the economic downturn. Others were looking to extract cash to pay down more expensive credit card debt, the lenders said, and some were trying to trade in their adjustable-rate mortgages for a fixed rate.

Annie Lu, 30, a nurse practitioner, said she called about refinancing when she heard that the economy was officially in a recession. She and her husband bought their house in Brooklyn about three years ago with a mortgage rate of 6.25 percent. She is hoping to qualify for a rate almost a percentage point lower. “It is good to prepare for the worst, and nobody minds saving as much as we can,” she said.

The Treasury’s consideration of additional efforts to breathe life into the housing market was first reported on The Wall Street Journal’s Web site. People familiar with the Treasury’s plans said that Treasury officials had met with top executives at Fannie and Freddie last week but that neither had been notified that any steps were taken toward putting such a plan into effect. By one account, the new program would be available only to home buyers, not to people who simply want to refinance their existing loan at a lower rate.

But those looking to refinance are already eyeing the lower rates. “Borrowers with reasonably good credit and a home that hasn’t lost too much value are going to find mortgage money plentiful and readily available,” said Brad Blackwell, national sales manager at Wells Fargo Home Mortgage.

As rates drop, more people, in theory, qualify for loans because their monthly principal and interest payments will be lower. But to qualify for the best rates, borrowers need to have impeccable credit — or a credit score of 720 or higher — as well as at least 10 to 20 percent of equity in their homes.

And while experts said they were heartened by the pickup in activity, the overall number of refinancings this year was expected to be only slightly more than a quarter of the volume at the height of the housing boom in 2003.

“It is not going to spike up rapidly or anywhere near as it has in the past because credit is still tight, the economy is still weak and there are fewer people that could refinance now than could before,” said Celia Chen, senior director of housing economics at Moody’s Economy.com. “But the decline in rates will help those that can.”

For all the renewed interest in refinancing, about 12 million households, or 15 percent of owners of single-family homes, are not eligible. Their mortgages exceed the value of their home, Ms. Chen said.

Meanwhile, entire categories of loan products have been eliminated. Subprime loans are not available along with stated income loans, where borrowers do not have to fully document their income. That has limited the options for many small-business owners and other self-employed individuals. People with inconsistent or unpredictable incomes, like those who rely on commissions, are also affected.

“You can imagine how many inquiries we get where we are done just as soon as we are done talking,” said Rick L. Dunham, vice president of Impact Mortgage Network in Mesa, Ariz., whose clients include small-business owners as well as individuals whose mortgages exceed the value of their home. “So we go to the next step and say, ‘O.K., your options are loan modification, short sale or nothing at all.’ ”

Credit standards have also tightened, which has made it more expensive — often prohibitively so — for many individuals to get a loan. Generally, individuals need a credit score of 620 to qualify for a loan, but they have to pay a fee equivalent to about 2.75 percent of the loan amount, which can translate into a rate of about 1 percentage point higher than the best rate available. In some cases, these individuals can get a better deal through the Federal Housing Administration.

“For borrowers on the fringe — low credit score, erratic documentation, high debt loads, et cetera — mortgage money may actually be available but the other terms and conditions that need to be jumped to have access to that financing make it prohibitive,” said Keith Gumbinger, vice president of the financial publisher HSH Associates.

Javier and Irina Lattanzio were motivated to refinance by the potential for monthly savings. Their strong credit history enabled them to refinance the $800,000 mortgage on their four-bedroom Manhattan apartment to a rate of about 5.6 percent. But the Lattanzios had to pay $70,000 so that their loan would qualify for conforming mortgage rates. Jumbo mortgages remain, on average, a full percentage point higher.

nytimes.com