But Bachmann’s voting record in the U.S. House of Representatives has not reflected her rhetoric at last night’s debate. From the transcript:

ANDERSON COOPER: Congresswoman Bachmann, does the federal government have a role in keeping people in their homes, saving people from foreclosure, in the state of Nevada?

MICHELE BACHMANN: That was the question that was initially asked. And what I want to say is this — every day I’m out somewhere in the United States of America, and most of the time I’m talking to moms across this country. When you talk about housing, when you talk about foreclosures, you’re talking about women who are at the end of their rope because they’re losing their nest for their children and for their family. And there are women right now all across this country and moms across this country whose husbands, through no fault of their own, are losing their job, and they can’t keep that house. And there are women who are losing that house.

I’m a mom. I talk to these moms. I just want to say one thing to moms all across America tonight. This is a real issue. It’s got to be solved. President Obama has failed you on this issue of housing and foreclosures. I will not fail you on this issue. I will turn this country around. We will turn the economy around. We will create jobs. That’s how you hold on to your house.

Hold on, moms out there. It’s not too late.

As The American Independent’s sister site The Minnesota Independent previously reported, in March, Bachmann voted to defund the Home Affordable Modification Program (HAMP) in a bill titled the “FHA Refinance Program Termination Act.” Within that same bill, Bachmann voted against an amendment that would have saved a portion of HAMP for senior citizens whose mortgages are in negative equity, or “underwater.”

The Minnesota Independent has also reported that Minnesota’s 6th District, which Bachmann represents, suffered the highest foreclosure rates in the state in 2008 (estimated at 5,227) and 2009. Nevertheless, the congresswoman has voted against all but one measure aimed at foreclosure relief during her time in office, including: the Housing and Economic Recovery Act of 2008, which included provisions to help struggling homeowners, signed into law by former President George W. Bush; the Mortgage Reform and Anti-Predatory Lending Act; the Neighborhood Stabilization Act, intended to provide funds to communities to buy and rehabilitate foreclosed homes; and the Expand and Preserve Home Ownership Through Counseling Act, the goal of which was to improve homeowners’ financial literacy.

In February 2009, Bachmann talked about the national foreclosure crisis on her blog in a way that did not reflect the sympathy she was trying to convey to women during Tuesday’s presidential debate:

When President Obama released his plan this week to prevent home foreclosures, the point he wanted to get across to everyone watching was that money from folks who have been making their payments on time will not just be handed over to those folks who got in over their heads and bought a house they knew they couldn’t afford.

It’s estimated that around four million homeowners are in danger of foreclosure, and in order to help them out, part of the President’s plan creates a $75 billion program that would go towards reducing a homeowner’s monthly mortgage payment. That breaks down to about $18,750 per home.

Now, we can debate whether this is the right thing to do as it may seem that you’re rewarding the irresponsible while punishing those who have been playing by the rules.

Watch snippets from last night’s debate, including Bachmann’s statements on foreclosures and her promise to moms, produced by HuffPost Politics:

The programs — the Home Affordable Modification Program, HUD’s Neighborhood Stabilization Program, the Emergency Homeowner Relief Fund (passed under the Dodd-Frank Act) and the FHA’s Short Refinancing Program — will be the subject of a March 2 hearing by the Insurance, Housing and community Opportunity Subcommittee. Bill mark-up is expected to take place the following day, March 3.

“In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners,” said U.S. Rep. Spencer Bachus (R-Ala.), who leads House Financial Services.

“These programs may have been well-intentioned, but they are not working and, in reality, are making things worse.”

The call to end the programs, which are considered key Obama administration projects to combat the nation’s foreclosure crisis, was joined by U.S. Rep. Judy Biggert (R-Ill.), who leads the Insurance and Housing Subcommittee.

“We need to break down barriers that have delayed the housing recovery, including expensive and ineffective government programs that have failed to help homeowners. Unfortunately, these programs were set in haste, executed poorly, and have done little to restore stability in the marketplace,” she said.

As The Iowa Independent reported in 2009, the Home Affordable Modification Program hasn’t performed as well as expected. Despite placement of $29 billion into the program that would allow banks to alter loans to make them more affordable, only 116,000 such modified loans had been made permanent as of the end of February last year. Democrats have charged that the problem lies not with the program itself, but the fact that the Obama administration relied on private mortgage servicing companies to provide the modified loans.

The goal of the program was to have reached around four million struggling homeowners by 2012. As of February 2010, nearly one million homeowners had entered into trial modifications, although there is no guarantee that such altered loans will become permanent after the 90-day trial, according to Phyllis Caldwell, who leads the federal program. And, even if the loans reach permanent status, many homeowners ultimately re-default. Currently, about 500,000 loans have been modified under the program, and only $840 million of the $29 billion invested in the program has been spent.

Although Democrats seem poised to fight for the other three programs on the chopping block, statements issued by U.S. Rep. Barney Frank (D-Mass.), who serves as ranking member of House Financial Services, neglected to mention the Home Affordable Modification Program.

Congress appropriated $7 billion for the Neighborhood Stabilization Program, which included $2 billion in stimulus funds. Two round of funding through the program have been provided to states and localities, but the bill being drafted by House Republicans would prevent a third round of roughly $1 billion in funding.

According to information from the Iowa Department of Economic Development, the state received roughly $21.5 million in funding as an adjunct to the Community Development Block Grant Program to provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become a source of abandonment or blight. Of that funding, approximately $4 million was earmarked for Des Moines and $1.5 million for Davenport. The cities of Cedar Rapids, Council Bluffs and Sioux City each had about $1.2 million allotted during state formulas, and the cities of Waterloo, Dubuque and West Des Moines were also expect have shares of the money to combat blight. The cities were singled out based on a formula used to calculate “Entitlement Cities,” and the department noted that if any decided not to accept the funding, the monies would instead be moved into a competitive application pot.

Nationally, of the roughly $8 billion that was appropriated for the FHA Refinance Program Termination Act, only about $50 million had been disbursed (about 35 applicants as of December 2010). The bill by House Republicans seeks to terminate the program and rescind all unused funding. It is unclear how much of the disbursed funding, if any, has made it into Iowa.

The Emergency Mortgage Relief Program is a reauthorization of the 1975 Emergency Homeowners’ Relief Act that was made possible by the larger Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in July 2010. It provided $1 billion for the U.S. Department of Housing and Urban Development to make mortgage relief payments to homeowners facing foreclosure for up to 12 months, and provided a pathway to an additional 12-month extension.

Perhaps not surprisingly, this was the piece of legislation most defended by Frank, who said the program is designed not to help people who were “imprudent or irresponsible,” but those that are unemployed. He called it “the single most effective anti-foreclosure program that has been put forward,” and noted that Alabama, Bachus’ home state, had a similar program in place.

If Republicans want to cut spending, Frank said, “there are better ways … than by attacking these programs.”

It’s kind of easy to take pleasure in all this and think the banks are being hoisted on their own petard, but it’s all bad for the economy for the mortgage market to be in such turmoil, to not know whether the right to foreclose will be enforceable. It’s a great deal of uncertainty and makes it much harder for private investors to get back into the mortgage market. It will probably make home buyers more uncertain because there’ll be a lot of mortgage holders who are not going to be paying their mortgages or be foreclosed upon.

I don’t think any member of Congress has been more critical of the Obama administration to do more about foreclosures. I introduced the cram-down legislation, I’ve written pieces saying TARP funds should be used to buy mortgages and modify them. I’ve been very vocal that the housing sector is an enormous part of our ongoing financial pain. But this does not accomplish the solution to the mortgage problem. It’s hard even to see how it ends. But I’ve got to think it creates more uncertainty about the health of the banks. [Treasury] Secretary [Timothy] Geithner testified before the Financial Services Committee a few weeks ago and I asked him whether this legislation had been taken into account in the stress tests, and he said he wasn’t sure. At the least, we now have resolution authority that we can take out for a spin.

But there are increasing worries that the scale of the scandal and the fallout on the financial markets might impact the stability of the financial system, necessitating some form of government intervention.

In June, home prices ticked up in 17 out of 20 major cities — most in San Francisco (up 14.3 percent year-on-year). Prices remained stable in Phoenix and Seattle, and declined only in Las Vegas.

The Case-Shiller index reports a rolling three-month average, meaning the June data included May and April transactions. That means that the data is skewed to the period before the expiry of the tax credits, $8,000 for first-time buyers and $6,500 for some repeat buyers.

Still, while banks foreclosed on more homes, the total number of filings has continued to fall, a sign that the foreclosure crisis might have peaked. Last month, 325,000 homes received a notice of default, auction or repossession — up 4 percent from June and down 10 percent from 2009.

All in all, it has been a horrible day in economic news, and housing news especially. Another report from Moody’s Analytics says the chance of a double dip — a return to technical recession, with the economy contracting rather than growing — has risen from 20 percent to 25 percent. Moody’s says that another drop in home values might catalyze a broader downturn, as economic growth is already slowing. During a double dip, home prices might fall a further 20 percent. They are already about 30 percent off their peak — more than 50 percent in Nevada.

“As a nation, we appear to be doing a better job sheltering those who might otherwise be living on our streets but clearly homelessness is impacting a greater share of families with children,” HUD Secretary Shaun Donovan said in a release. The report noted 78 percent of people in shelters are adults, 62 percent are members of a minority group and 61 percent are male.

Between 2008 and 2009, the number of individuals in emergency shelters and transitional housing programs declined 5 percent. But the number of homeless households increased 7 percent, to more than 170,000, and has soared 30 percent since 2007. The report notes:

The continued rise in family homelessness across the three years, from 131,000 families in 2007 to 170,000 families in 2009, is almost certainly related to the recession. However, the increase was more pronounced between 2007 and 2008, even through unemployment rates remained high during [2009]. It may be that many families already at risk of becoming homeless lacked sufficient support networks and became homeless almost immediately after the economy turned down. A much larger group turned to family and friends and may be doubled up and still at great risk of becoming homeless. The percentage of adults in families who reported that they had been staying with families before entering shelter increased steadily over the three-year period, from 24.2 percent in 2007 to 29.4 percent in 2009, as did the total percentage reporting that they had been in some sort of “housed” situation before becoming homeless, reaching 62.5 percent in 2009.

All of the increase in family homelessness in 2009 compared with 2008 was in the use of emergency shelter by family members, rather than transitional housing. Families stayed longer in shelters in 2009 than in 2008, with the median number of nights rising from 30 to 36. Not only did family homelessness continue to increase between 2008 and 2009, it also seems to have become more severe in the sense that it took the typical family longer to leave shelter.

And the report notes that the high rate of unemployment, peaking foreclosure crisis and the sustained incidence of families “doubling up” in houses in response might drive the number of homeless families up in 2010.

A recent study found a nearly five-fold increase in the rate of housing overcrowding, suggesting that many families are doubling up in response to the economic downturn. If some of these family support networks already are struggling to make ends meet, some of the doubled-up families may find their way into the homeless residential service system during 2010.

In the good column: The number of homes receiving default notices fell 12 percent and the number of foreclosure auctions fell 13 percent. In the bad: Bank repossessions hit an all-time high, with banks taking over 92,432 homes last month alone, an increase of 45 percent year-on-year.

“There were two important milestones in the April numbers that show foreclosure activity has begun to plateau — but at a very high level that will not drop off in the near future,” RealtyTrac’s chief executive officer, James Saccacio, said in a release. “April was the first month in the history of our report with an annual decrease in U.S. foreclosure activity. Secondly, bank repossessions, or REOs, hit a record monthly high for the report even while default notices dropped substantially on a monthly and annual basis. We expect a similar pattern to continue for most of this year, with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties.”

The “sand states” — Nevada, Arizona, Florida and California — continued to bear the worst of the foreclosure crisis. And the report noted that strategic defaults are rising, and could bump the foreclosure number up again in the coming months.

The case is now famous. The homeowner had applied for the Home Affordable Mortgage Program, or HAMP, an Obama administration initiative to give distressed and tapped-out borrowers lower monthly payments. Applicants are meant to be just scraping by — they have to file hardship affidavits and the government presumes they have trimmed all the fat from their budgets. But this “HAMPlicant,” the writer on the blog Calculated Risk noted, had given up on a $1,880 a month mortgage and instead had spent hundreds of dollars at a spa, tanning salon, gourmet grocery store and liquor store, capping it all off with $1,700 in charges to mall stores from Baby Gap to Best Buy.

[Economy1] Bloggers seized upon the case, and used it to make a broader argument. Such “foreclosure queens,” to coin a term (and to try to capture some of the scorn heaped on these strategic defaulters on the Internet) are stopping paying their mortgages and taking to the malls in big enough numbers to account for a surprising rise in consumer spending. Put another way: People ditching out on their mortgages are holding up America’s consumption.

Anecdotally, at least, it seems true. Millions of homeowners now owe more on their mortgage than their house is worth (meaning that if even if they sold the house, they would still owe the bank) and therefore have simply stopped paying their mortgages. Mortgage lenders and courts are so backed up with foreclosures — hundreds of thousands of them per month — that the time between the first late payment and eviction now stretches as long as 20 or 24 months in some parts of the country. That means that when a homeowner decides to stop sending off that $1,000 or $1,500 or $5,000 check to the bank, she has that much more spending cash until she needs to move out and find a new home.

But the anecdotes do not yet an economic reality make — and other economists caution that the evidence that the phenomenon is widespread enough to change the macroeconomic picture is thin. Despite that reality, the mortgage-distress and foreclosure blogs have hundreds of such stories of people “relieved” once they decide to default, determining that it makes more sense for the bank to take the house back. One young couple, for instance, wildly overpaid for their home in 2006. Six months ago, they decided to stop sending in checks, and to wait for the bank to contact them. They just returned from a week-long New York City vacation and have not heard a word from the bank.

It was Paul Jackson, the founder of Housing Wire, who first put the economic pieces together and said that strategic defaulters — people walking away from their mortgages — must be the reason consumption is rising despite high unemployment and declining real wages. “[M]illions upon millions of consumers in the U.S. [are] meeting their shelter needs for free, even if only temporarily; and what’s becoming of any extra disposable income, since no rent or mortgage need be paid?” Jackson wrote. “[W]e’re seeing consumer spending head northward, and for five straight months, too…. Put simply: people are spending their mortgages.”

The argument earned some guffaws — from, for instance, prominent economics and housing blogger Barry Ritholtz, who called it “bass ackwards.” People defaulting on their mortgages had run out of credit and still had high debt burdens, he argued. How could they be buying enough to raise consumption on a national scale?

But the idea gained support from some major economists who declared the logic impeccable. Mark Zandi, the chief economist at Moody’s Economy.com and a much-followed economic prognosticator, declared it a convincing case, and did some back-of-the-envelope math to support it. “Some 6 million homeowners not making mortgage payments [are] probably freeing up roughly $8 billion in cash each month,” he said. “Assuming this cash is spent (not too bad an assumption), it amounts to nearly one percent of consumer spending.”

Still, the hypothesis remains a hypothesis say other economists that specialize in housing — and ultimately the numbers do not add up, at least not yet. While the microeconomic phenomenon (of strategic defaulters spending more) is certainly occuring, the macroeconomic one (of strategic defaulters spending enough to lift national consumption rates) is not. Strategic defaulters on the loose in the malls account for just a small fraction of the gains in consumer spending, better explained by pent-up demand, continued low prices and improving sentiment on Main Street.

Christopher Thornberg — an economist, the principal at Beacon Economics in Los Angeles, and an early identifier of the real-estate bubble — calls Jackson’s theory an “urban legend,” compelling but illusory. “I did some calculations, and even being generous, all the money not being spent on mortgage payments equals about 0.7 percent of income, compared to 0.3 percent of income three years ago,” he says. “Consumer spending is rising at a 3 percent annualized pace [meaning] only a small portion of [rising consumer spending] can be explained by strategic defaults.” The rest simply stems from a better economic climate and many wage-earners and families tentatively deciding to open up their wallets.

Dean Baker, the co-director of the Center for Economic and Policy Research in Washington, D.C., agrees. He argues that the rise in consumption is simply a rebound from an unusually deep trough in 2009. “We had such a sharp fall-off last year that to some extent it’s going to be self-correcting,” he notes. “The fact that we’ve somewhat of an uptick is not that surprising to me.” He adds that most of the proponents of the theory on the internet were looking to March purchasing data that was unusually high due to the early Easter. “I’m just not conviced we’ve seen so much of a jump in consumption that we need to explain it,” he adds.

That said, the rising number of defaulters will only increase the backlog for banks and courts. The growing awareness of the phenomenon could further fuel it, as well. And in the next year — with unemployment still high and the foreclosure crisis worsening — the effect of the cash-rich strategic defaulters could become more and more outsize. To see if strategic defaulters are moving the national consumption figure, Baker says, look to to California, Florida, and Nevada – three states with sky-high unemployment and the highest rates of foreclosure. Thus far, consumer spending has not turned around in those three states. And if it does, and sharply, it might be the strategic defaulters to blame.

Leonhardt shows that the rent ratio — the price of the home divided by the estimated annual cost to rent one like it — in many metro districts has fallen enough to signal that it is a good time to consider purchasing a home rather than renting one. Housing market experts believe that if the rent ratio is lower than 20, a home is of good enough value to consider buying. If the number is higher than 20, a purchaser is counting on real estate prices to rise to make up the higher aggregate cost of paying a mortgage. (During the worst of the housing bubble, homebuyers in places like Ft. Myers, Fla., were bidding on homes with sky-high rent ratios in the 40s.)

Leonhardt’s analysis shows that homes seem to be a decent deal in markets like California’s Inland Empire and Las Vegas — the very markets that stoked the worst of the housing crisis. But those parts of the country are suffering from high, high unemployment and a long real-estate hangover. And Leonhardt’s analysis does not take into account the fact that many mortgage experts believe those markets still have a ways to fall. I took the markets the Times column indicates might be a good deal — with rent ratios below 20 — and overlayed the data with information from RealtyTrac indicating the proportion of houses that received a foreclosure notice last month. In places like Washington, D.C., and Seattle, just one in 1,800 homes received a foreclosure notice. But in Las Vegas, one in 69 did, meaning a whole lot of houses might be coming on the market soon.

Indeed, the foreclosure crisis looks like it might worsen in many already hard-hit markets this summer and fall. The blue line on the graph below shows the rent ratio. The purple line shows the proportion of homes in the midst of foreclosure last month — and indicates markets that look likely to gain some capacity in the next few months.

So people looking to buy new homes might want to think twice before sinking their savings into one of the markets with a long purple line here, like Las Vegas or Riverside or Miami. On the other hand, the real estate markets in cities like Indianapolis, Dallas and Washington look considerably safer.

Lenders are to receive 10 to 21 cents of federal subsidies per dollar of loan principal reduced, depending on the degree to which the borrower is underwater.

That has the potential to be a larger incentive for some lenders than even allowing a short sale on a property that is underwater. The principal would be reduced over the course of three years, though many mortgage modification participants default within a year, and only borrowers who owe more than 115 percent of the value of their home will be eligible. The average homeowner in America today owes 114 percent of the current market value of their home.

Additionally, the FHA will try to convince lenders to refinance current loans with FHA-backed loans at something resembling market value — but that program will be entirely voluntary. For homeowners to get an FHA-backed loan, the lender must forgive at least 10 percent of the outstanding mortgage and allow homeowners to refinance at 97.75 percent of a home’s current value. For the average homeowner today, that means a lender would have to forgive 16.25 percent of the current mortgage of their own free will. For people who have second mortgages, the FHA will allow them to refinance for a total value on both mortgages of up to 115 percent, but that would require that two lenders agree out of the kindness of their hearts to forgive substantial portions of a homeowner’s debt. The only incentive for lenders will be good PR and potentially fewer immediate foreclosures.

The remaining helpful part of the new program will subsidize unemployed homeowners’ mortgage payments for three to six months until they find a new job. Of course, as the jobless recovery continues, more and more people are employed for longer than three to six months, so this might or might not be helpful for anything more than staving off foreclosures for three to six months — which, as many people are discovering, is the main result for most people. As it is, the administration admits that it expects another 10 to 12 million foreclosures over the next three years while these programs help no more than three to four million homeowners remain in their homes.