* Romney's great-grandfather moved to Mexico in 1880s
* Romney had strong support in Mormon community
* His stance on immigration stance seen as too tough (Recasts with Romney's defeat)
By Dave Graham
COLONIA JUAREZ, Mexico, Nov 6 In a verdant oasis in the deserts of northern Mexico, Republican challenger Mitt Romney's Mormon cousins mourned his presidential election defeat on Tuesday as a lost opportunity to pull the U.S. economy out of the doldrums.
Romney's relatives in Mexico, whom he has never visited, had high hopes their clan's most famous son would win the keys to the White House, create jobs and boost trade.
When the former private-equity executive and Massachusetts governor conceded defeat to President Barack Obama early on Wednesday, his Mexican brethren reacted with a mixture of dismay and stoic resignation, hailing his candidacy as a step forward for promoting understanding of the Mormon community.
"I'm just feeling very, very sad," said Virginia Romney, who was born on the same day as Romney in 1947, and is married to his Mexican second cousin Kent.
"Just to let him slip away from being president of the United States is a real tragedy for the U.S. because he could have given the country so much," the 65-year-old added. "He has been such a success in everything he has done."
The family's Mexican roots go back to Mitt Romney's great-grandfather Miles P. Romney, who crossed south of the border in the 1880s, like other early Mormon settlers in Mexico fleeing U.S. marshals who were seeking to arrest him for practicing polygamy.
His descendants still live in Mormon enclaves in the state of Chihuahua about 200 miles (320 km) from the U.S. border and near where Mitt's father, George Romney, was born. There are about 300 Mormons left in the area, and dozens called Romney.
Today, Colonia Juarez is a pocket of green fields, manicured lawns, well-pruned trees and American-style suburban life hemmed in by mile upon mile of desert waste and scrubland.
Driving down a hill into leafy, ordered surroundings, a gold statue glimmers atop a white Mormon temple. In the cemetery, the modest graves of Romneys have simple stone plaques, while flowers and crosses adorn elaborate Mexican tombs.
Leighton Romney, another of Mitt's Romney's second cousins in Chihuahua, said the Republican's hopes had been buried because his party had failed to connect with voters on issues like immigration and foreign policy.
"As poorly as the economy is doing and as bad a record as Obama has, in some way the Republicans weren't able to take advantage of it," said the 53-year-old businessman. "Mitt ran a good campaign. And he did a lot for his party."
"He also did a lot for his religion. He brought it to the forefront and hopefully people will be more informed about the Latter Day Saints church now," added Leighton, who was local organizer for the successful presidential election bid in July by Mexico's incoming leader, Enrique Pena Nieto.
Many of Romney's Mexican relatives have built successful careers as farmers selling fruit and other produce to the United States, and they were adamant the multi-millionaire Republican was the best man to turn around the struggling U.S. economy.
His defeat was a loss to the United States, they said.
"In my opinion Barack Obama is not doing the job," said Michael Romney, 64, vice principal of the school in Colonia Juarez and Romney's second cousin. "I have three boys and a daughter in the United States, and their lives are drastically different after these past four years."
Despite rallying behind the Republican nominee in the election, the Mexican Romneys were critical of the Republican line on immigration issues in the United States, arguing that many Mexicans crossing the border illegally were just acting out of economic necessity.
Republicans generally back strict controls against illegal immigration and Romney took a hard line to win his party's nomination. As candidate, he sought to woo Hispanic voters by pointing out that his father was Mexican-born, but otherwise said little about that part of his family history.
George Romney was just 5 years old when the family left the area in 1912, driven out with others under threat from Pancho Villa's rebel troops during the Mexican Revolution.
Some went back when things died down, but George Romney's parents settled in the United States. He became a successful car executive and Michigan governor, and made his own presidential bid, failing to win the Republican nomination in 1968.
Mitt Romney's relatives had hoped he would bring to the White House the pioneer spirit of his forebears, Mormons who lived in dirt dug-outs and overturned wagons, irrigated a vast desert to raise herds of cattle and cultivated peach and apple orchards.
Two of his siblings visited Colonia Juarez several years ago to see a small wooden train station said to have been built by his great-grandfather, as well as other Romney landmarks.
The candidate's Mexican connections drew considerable media interest in the campaign, and some are looking forward to the spotlight moving away from the quiet little Mormon settlement again.
"Thankfully, our 15 minutes of fame are now over," said Leighton Romney. "Now we can get back to our lives and Obama can realize he has a huge debt to take care of." (Writing by Dave Graham and Simon Gardner; Editing by Kieran Murray and Peter Cooney)