JOHN McCAIN: OCTOBER 8th

October 8th, 2008, 10:18 pm · Post a Comment · posted by Dan Lehr

A Look at McCain’s Plan to Rescue Homes

At last night’s debate, John McCain unveiled a plan that would have the government provide $300 billion dollars to help keep people with shaky mortgages in their homes.

After the jump, his verbatim plan from his website, a stump speech by both McCain & his wife Cindy in Pennsylvania today, & an interview McCain & Palin gave to Sean Hannity of Fox News.

“John McCain will direct his Treasury Secretary to implement an American Homeownership Resurgence Plan (McCain Resurgence Plan) to keep families in their homes, avoid foreclosures, save failing neighborhoods, stabilize the housing market and attack the roots of our financial crisis. America’s families are bearing a heavy burden from falling housing prices, mortgage delinquencies, foreclosures, and a weak economy. It is important that those families who have worked hard enough to finance homeownership not have that dream crushed under the weight of the wrong mortgage. The existing debts are too large compared to the value of housing. For those that cannot make payments, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages.

The McCain Resurgence Plan would purchase mortgages directly from homeowners and mortgage servicers, and replace them with manageable, fixed-rate mortgages that will keep families in their homes. By purchasing the existing, failing mortgages the McCain resurgence plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.

The McCain resurgence plan would be available to mortgage holders that:

Live in the home (primary residence only)
Can prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment).

The new mortgage would be an FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner. The direct cost of this plan would be roughly $300 billion because the purchase of mortgages would relieve homeowners of “negative equity” in some homes. Funds provided by Congress in recent financial market stabilization bill can be used for this purpose; indeed by stabilizing mortgages it will likely be possible to avoid some purposes previously assumed needed in that bill.

The plan could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government’s conservatorship of Fannie Mae and Freddie Mac. It may be necessary for Congress to raise the overall borrowing limit.”

Read the very last sentence again. Now read it once more. Got it?

I have already spoken with one very staunch Republican here at NewsChannel 9 who says this deal is a very bad idea. “We are turning into the Roman Empire” he says. “All we care about is goodies from the government & staying entertained.” Frankly it’s hard for me to disagree with that sentiment. This person (rightly in my view) sees this plan as yet another reason for people to absolve themselves of personal responsibility.

This is not the only criticism of this plan on the right. Michelle Malkin was particularly vitriolic:

“He spent the entire debate assailing massive government spending — while his featured proposal of the night was to heap on more massive government spending to pursue home ownership/retention at all costs. If Obama had proposed this, the Right would be screaming bloody murder about this socialist grab to have the Treasury Department renegotiate individual home loans and become chief principal write-down agents for the nation.”

What do you think about it? Post a comment!

McCain stumped in Pennsylvania today with his wife, daughter, & running mate (see excerpts of Palin’s speech here).

Here’s Cindy:

Unfortunately the only clip from this event I can find is this gaffe, in which McCain says “my fellow prisoners” instead of “my fellow Americans:”