Campaigning last week in Nevada, the epicenter of the housing bust, Mr. Romney was asked by the Las Vegas Review-Journal editorial board what he would do about housing and foreclosures. His reply:

“One is, don’t try and stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up. Let it turn around and come back up. The Obama Administration has slow-walked the foreclosure processes that have long existed, and as a result we still have a foreclosure overhang.”

How’s that for refreshing? After five years of politicians trying without success to levitate the housing market by postponing foreclosures, Mr. Romney dared to tell the truth. Parts of the U.S., including Nevada, still have too many homes, and that supply needs to be sold off and fixed up so the market can find a bottom before home prices can start to rise again. The faster that process proceeds, the faster the recovery will take hold.

For this apostasy, Mr. Romney is getting whacked by the Democratic National Committee in a 30-second TV ad that first aired Tuesday in Arizona: “Almost half of Arizona homeowners underwater. Foreclosures everywhere. And what’s Mitt Romney’s plan?” the ad intones. Then it quotes Mr. Romney: “Don’t try and stop the foreclosure process. Let it run its course and hit the bottom.'”

The attack ad doesn’t quote the second part of Mr. Romney’s Las Vegas answer, which spoke another truth: “Number two, the credit [that] was given to first time homebuyers was insufficient and inadequate to turn around the housing market. I think it was an ineffective idea. It was a little bit like the cash-for-clunkers program, throwing government money at something which was not market-oriented, did not staunch the decline in home values anymore than it encouraged the auto industry to take off.”

While he was at it, Mr. Romney might have added to his list of “ineffective” housing ideas the Bush Administration’s Hope Now program, the Barney Frank-George W. Bush Hope for Homeowners plan, the Obama Administration Home Affordable Modification Program, the Emergency Homeowners’ Loan Program, and, this week, an expanded version of the March 2009 Home Affordable Refinance Program (Harp).

All of these government plans used taxpayer cash to forestall foreclosures in an attempt to stop housing prices from falling from their manic heights. How’s that working out? Five years into the housing bust, the U.S. still has 10.9 million “underwater” borrowers, whose homes are worth less than the original purchase price. States like Florida, Nevada and New Jersey have long foreclosure backlogs, and home prices still haven’t begun to recover in much of the country.

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Mary Kissel of the editorial board says Mitt Romney has the right answer on housing.

Mr. Romney’s advice to let the foreclosure and resale process take its course as rapidly as possible until the market finds a “bottom” couldn’t possibly do any worse than the Obama Administration and its frenetic attempts to “save” homeowners have done. To the extent that it encourages a faster recovery it is also more compassionate. As the nearby chart shows, while the fall in home prices has been painful for current owners, it has also made housing far more affordable for new buyers.

Which brings us to the latest White House housing gesture, Harp II, to make it easier to refinance mortgages guaranteed by Fannie Mae and Freddie Mac. Harp I was supposed to help four to five million borrowers refinance, but only around 894,000 have used it so far.

So why not double down on lack of success? Harp II will remove many of the restrictions on banks and borrowers that were contained in Harp I to protect taxpayers. These include removing the 125% loan-to-value ceiling for underwater borrowers, dealing with bank litigation concerns, and eliminating the need for a new appraisal. It also extends the end of the program to December 31, 2013, from next June 30.

No doubt this will help some homeowners refinance, especially with the Federal Reserve continuing to push long-bond rates even lower. But it is not a free lunch, especially for investors who hold mortgage-backed securities. Those securities will fall in value as borrowers prepay their old loans, and sure enough the MBS market fell out of bed after the White House announcement on Monday.

The Congressional Budget Office tested an economic model of the mock refinancing plan in September and estimated that while government enterprises like Fannie and Freddie would save $3.9 billion from refinancing, they’d also lose $4.5 billion from the reduced value of their mortgage-backed securities. Pension funds, banks and others would lose as much as $15 billion. Such investors don’t get any sympathy these days, but don’t be surprised if they’re skittish about re-entering America’s politicized housing market in the future.

As for Mr. Romney, in his Vegas interview he did add briefly that “the idea of helping people refinance homes to stay in them is one that’s worth further consideration,” subject to more information. That’s the poll-driven candidate talking, but for today let’s congratulate the truth-teller.