McCain Mortgage Plan Could Cost $300B

[babylonsister]

http://voices.washingtonpost.com/the-trail/2008/10/08/mccain_adviser_offers_details.html

McCain Adviser Offers Details on Mortgage Plan

By Michael Abramowitz


John McCain's policy adviser Doug Holtz-Eakin asserted John McCain's new proposal for the government to buy bad mortgages would eventually help lower interest rates, stabilize housing values and perhaps help millions of homeowners avoid foreclosure or obtain more affordable mortgages.

In a conference call with reporters this morning, Holtz-Eakin offered a few more details of the so-called American Homeownership Resurgence Plan, unveiled at the Tuesday night debate, in which a homeowner having difficulty making payments or facing foreclosure would be eligible for an FHA-insured mortgage. He said that some of the money for the new program, which could cost $300 billion, could come from the new $700 billion authority granted the Treasury Secretary to buy distressed assets; he also said some of the funds could also come from existing authority in the Federal Housing Administration.

Holtz-Eakin said the interest rates on the 30-year fixed mortgages could be as low as 5 or 5.25 percent, and that homeowners wishing to refinance would work through traditional mortgage brokers.

One looming question today is how new McCain's plan actually is. The Obama campaign said its candidate has been pushing the idea that the government should purchase mortgages directly since Sept. 24, and Obama has mentioned the idea as well.

Holtz-Eakin acknowledged that the idea has been bubbling out there but said what McCain is proposing is much more ambitious than anything else. "The senator is interested in timely responses," he said.