Foreclosure anger hits fall election campaign

MIAMI (AP) — Three weeks before the election, anger over tainted home foreclosure documents is bursting into the battle for control of Congress, especially in hard-hit states such as Nevada and Florida. Democrats in tight races in the worst housing markets are pressing for a national moratorium, putting a reluctant White House on the spot.

Leading the call for a nationwide time-out on kicking people out of their homes is Democratic Senate Majority Leader Harry Reid, who is locked in a neck-and-neck re-election contest with tea party-endorsed Sharron Angle in Nevada, which has the highest foreclose rate in the country. Reid is decrying “reports of shoddy and defective affidavit preparation.”

On Wednesday, attorneys general and bank regulators in all 50 states announced a joint investigation into questionable foreclosure practices, including forged documents, apparently bogus signatures and questionable notarizations. U.S. Attorney General Eric Holder has said the Justice Department also is looking into the allegations — but he stopped short of opening a formal investigation.

While the allegations have suddenly become part of the political dialogue in a volatile election season, politicians are all over the map on the issue, some fearing that direct government action could snuff out a fragile recovery. Some candidates appear to be ducking the issue entirely, leery or unsure how to address it.

Tea party activists and many mainstream conservatives strongly oppose any additional government intervention in the nation’s economy, including a foreclosure moratorium. “You’re going to shut down the housing industry. People have to take responsibility for themselves,” said No. 2 House Republican Eric Cantor of Virginia.

For President Barack Obama, it’s a dicey issue.

The White House doesn’t want to be seen as acting to shield banks, which have been a frequent target for both parties. Wednesday’s announcement by JPMorgan Chase & Co. that its profits jumped 23 percent in the July-September quarter — while much of the economy still struggles — won’t win the industry any new fans.

But the administration also doesn’t want to spook fragile housing and financial markets. “There are a series of unintended consequences to a broader moratorium,” said White House spokesman Robert Gibbs.

One reason for the White House caution: No matter the outcome this Election Day, Obama will still have two years to try to right the economy. But for those on Nov. 2 ballots, the day of reckoning is a lot closer, the passions hotter.

More than 2 million households are now in foreclosure and an additional 5 million have missed at least one mortgage payment, according to Lender Processing Services Inc., a company that helps banks process foreclosures.