McCain's Mortgage Bailout - Another Stunt That Changes Every Minute

[Median Democrat]

The most recent iteration/clarification is that McCain would take $300 billion of the $800 billion bailout to buy mortgages that are currently more than the homes are currently valued, a extend a new loan to homeowners at the current market price. Yesterday, it was $300 billion in new spending.

Obama proposed, and Republicans rejected, modifying bankruptcy rules to allow courts to modify the terms of loans. The McCain plan is far more expensive and intrusive than Obama's proposal, yet McCain also wants to balance the budget. Also, unlike the bailout, where the taxpayers could potentially recover its money back the way the RTC did in the 80s, under McCain's most recent iteration, the Government permanently eats the costs of the difference in market value, so Taxpayers can kiss that money good bye permanently.

Finally, who knows how the Government would decide who gets relief or not. It is hard to say, because the McCain has been tweaking the proposal since McCain made reference to it, and conservatives jumped down his throat about $300 billion in new spending, McCain now says he would take it from the bailout funds.

http://ap.google.com/article/ALeqM5hfHkP_o1JurPm5e9mEZEFMFKaJwgD93MGJPG2

[CTyankee]

1. It's like Wile E. Coyote's schemes to get Roadrunner.

Each of his stunts remind me of the Acme safe on a rope, the Acme rockets on his roller skates or (my personal favorite) the babygrand piano drop over the canyon. In any case, he goes shooting over the cliff...:rofl:

[SoonerPride]

2. Like trying to nail McCain's dessert from his rest home to the wall?

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[Raven]

3. If you go to McCain's website and read the description of this

mortgage bailout proposal and you know anything about real estate law, you will realize that whoever came up with this plan knows nothing about how a mortgage works or how the mortgage security derivatives work. It is a cynical and pathetic attempt to com people.

[Johonny]

4. McCain wants to save peoples housing equity

when Americans are crying for him to save their homes. The fact he doesn't understand the difference is the reason he lost the race.

[ErinBerin84]

5. you should have seen Elizabeth on The View gushing over this joke of a "proposal" today

It was hilarious. She also parroted the RNC email from last night "That was weird, it wasn't even a real town hall!"

[amborin]

6. the approved bailout ALREADY contains the idea McCain stole from Obama:

"McCain's "new" mortgage plan

The Republican camp pooh-poohed a similar idea after Bear Stearns colapse.

John McCain used last night's debate to tout a new "Homeownership Resurgence Plan", which would empower the US treasury department to buy up troubled mortgages outright and replace them with fixed-rate loans guaranteed by the Federal Housing Administration (FHA). The Republican candidate claimed total responsibility for the idea, telling the nation that his plan was "not Senator Obama's proposal, it's not President Bush's proposal".

Of course, as the Obama camp and Dow Jones MarketWatch promptly pointed out this morning, that mortgage-purchasing authority is already included in the $700bn financial rescue plan that both Obama and McCain supported.

McCain also might have looked at his past position on relieving homeowners of "negative equity" -- he would have noticed that his economic adviser, Douglas Holtz-Eakin, dismissed the idea in March (just after the implosion of Bear Stearns).


Here's Holtz-Eakin, when asked during a press conference about government purchasing of home loans:

Senator Clinton seemed to hint at that with a broad FHA authority to buy any loan that's underwater without asking the question why, and that's a mistake. ... And in providing any assistance, it should be the case that everyone has some skin in the game, so the household ends up with some equity interests so they don't walk away, you can't just guarantee a loan with zero equity, and you want to make sure that all parties are making some sacrifice in order to merit the receipt of taxpayer dollars.

Holtz-Eakin did outline one principle that has remained constant: under McCain's plan, no homeowner who took out a no-money-down mortgage should get aid. This might be a problem, however, given that the FHA is already insuring large amounts of no-money-down mortgages right now. More than 66,000 of the mortgages backed by the government in the first half of this year, or 36.7%, were "seller-funded" (as opposed to funded by the home buyer), according to Forbes.

<http://www.guardian.co.uk/world/deadlineusa/2008/oct/08/uselections2008.creditcrunch>

[amborin]

7. conservatives criticize similar mortgage buy back proposals have been made for months

here, hilariously, is conservative think tank criticism of one:

<http://www.heritage.org/Research/Economy/wm1865.cfm