09/18/2012 08:51 am ET Updated Sep 18, 2012

What a "Three House Sweep" Means for Real Estate

Given the degree of acrimony between the two factions of Congress these days, it makes one think that if the Emancipation Proclamation were introduced into Congress by the Democrats to free slaves, the Republicans would block its passage and declare it as a job destroyer.

On a more cynical level, the Civil War was all about real estate. Fortunately, the Northerners were better surveyors, brokers and messengers -- and the rest is history. In an environment where many Americans are saying to both political parties "what have you done for me lately," real estate relief to homeowners, industry professionals and consumers will be profoundly affected if a "three house sweep" occurs by either party -- which leads to the political conundrum, what happens if there's a "three house sweep" this fall.

This is a good question, since if a political stalemate exists on the morning of Nov. 7, 2012, Americans can expect a lack of assistance in the continuing real estate hangover, which is quickly approaching the half-decade mark.

Notwithstanding that a multitude of local real estate markets have hit double digit per annum rates of appreciation nationwide, the country as a whole is still hurting. This is especially so for those that are in need of help the most, and for whom are the least likely to be heard from their political representatives.

The Sweeps

Although somewhat improbable -- and depending which pundits, polls or politicos you follow, the Democrats would have to win 25 additional seats to achieve a majority rule in the House of Representatives. And presuming the current 53 Democrat/47 Republican split remains unchanged in the Senate, both houses could go to the Democrats.

And unless an anomaly occurs in the Electoral College this Nov. 6, 2012, it is unlikely that Mr. Romney would pull off an upset. With both candidates at a near statistical tie with about 45 days before game day, if one were a betting man, you'd likely play it safe and put your money on Mr. Obama. Political Hail Mary's are a rare occurrence. The two most recent: "Dewey beats Truman" and Gore v. Bush.

In fact, at this juncture, and similar to how quarterback Joe Namath of the New York Jets called Super Bowl III in 1969 the week before kickoff -- and actually won, I'm calling this election for Obama by 2 to 4 million votes in the popular election. As for the electoral, I can guarantee at least 271 votes if he wins it.

The tipping point, and for all Monday morning quarterbacks out there, Romney's 9/11 Libya foreign policy snafu will likely be viewed as the beginning of the end. If this is the case, then Romney will be the only one in America for whom 9/11 has its own special meaning.

Real Estate Landscape

Theoretically, with a "three house sweep" in 2012, the Democrats will finally have enough courage to clean house on its wish list. A wish list that it regrets it didn't and/or wasn't able to accomplish the first two years it controlled the three branches of government beginning in 2008. And when you consider the liberal bias that exists in print media today, unofficially they'll have a fourth branch of government -- the Media.

Real estate professionals nationwide, including myself -- formerly a prolific real estate investor who thought of the four letter word FLIP as a wonderful adjective, are hopeful for lenders to lighten up a bit on loan underwriting standards. Not crazy underwriting standards that will threaten the end of mankind again, but just enough of a let-up that allows investors to put down a little more cash in exchange for a slightly lower FICO score. Nothing too wild, but just enough to let you know that investors are willing to put more skin in the game -- and keep the transactions above board.

Homeowners want the same economic relief. As an example and in the pipeline for possible congressional approval, is a reiteration and expansion of the HARP 2.0 program (Home Affordable Refinance Program), and what is secretly known as HARP 3.0. Given the contentious atmosphere on Capitol Hill with a Republican controlled House of Representatives, and an open-minded Senate, HARP 3.0 would likely never see the light of day.

A "three house sweep" with the Democrats works better for the housing industry as a whole. Which is ironic, since the NAHB (National Association of Home Builders) boosts a white male Republican-dominated membership, the anti-thesis of the Democratic Party. But "all is fair in love and war" -- and apparently "money" as well.

A "three house sweep" with the Republicans won't simply yield the same results with a Republican-controlled government of all three branches. It just isn't in the moral DNA of hardcore Republicans to wholeheartedly pass legislation that appears as a handout. Kinder gentler Republicans', such as an Eisenhower, Ford or Bush I would be receptive to such outreach, but present dynamics mute this type of constructive political discourse.

So with the 150-year anniversary of the reading of the Emancipation Proclamation on Sept. 22, 1862 -- by the first Republican, Abraham Lincoln; which from a cynical perspective was a war over real estate and how a landowner could harvest that real estate -- and with whom, we clearly know that in some instances real estate is not "all local", but interconnected in such a way that nationally when the three branches of government act in unison as a single political party -- to the right or left, a profound effect can be felt -- for the better, and hopefully not for the worse.