John McCain Offers A Bailout For Burdensome Mortgages

Hillary Clinton and Barack Obama have criticized John McCain for not talking about the crisis in the mortgage industry, so now he is offering his suggestions to fix this mess. He plans to have roundtable discussion Thursday at Windows We Are Inc. in Brooklyn, and has offered some of his prepared remarks for the press. “There is nothing more important than keeping alive the American dream to own your home,” McCain said. “And priority No. 1 is to keep well-meaning, deserving home owners who are facing foreclosure in their homes.” McCain’s plan offers new loans to to people with what McCain calls “burdensome mortgages.” The new loans will be at a manageable rate and based on the current market values. The lenders would get government backed certificates that would guarantee the original value of the homes. The homes would also have to be a primary residence, and the borrower would have to be able to afford the loan. If they really could afford the house in the first place, they wouldn’t have been in this situation, and the government wouldn’t need to intervene, but that is another story. “It is built on the reality that homeowners should have an equity capital stake in their home,” McCan said. “Homeowners would end up with a 30-year mortgage and an equity stake in their home. The new lender would receive a federal guarantee of the mortgage, and the taxpayer gets a benefit if the sale value ever recovers.” Notice that the taxpayer only gets a benefit if the home owner sells for a profit, otherwise all these failed mortgages will be another burden for the taxpayer. Maybe another solution for this crisis should be that people that make only 60 to 80 thousand dollars a year should not try to buy houses that are currently valued at over 300 thousand dollars. If those houses remain empty, the values will drop. I don’t think the government should be in the business of bailing out people that made really bad decisions, especially after we ignored people that were victims of natural disasters like hurricane Katrina.
Here is some more from McCain’s HOME plan speech;

I believe a more robust, timely and targeted effort is my HOME plan. It offers every deserving American family or homeowner the opportunity to trade a burdensome mortgage for a manageable loan that reflects the market value of their home. This plan is focused on people. People decide if they need help, they apply for assistance and if approved the government under my HOME Program supports them in getting a new mortgage that they can afford. There will be qualifications which require the home to be a primary residence and the borrower able to afford a new mortgage. We will combine the power of government and the private sector to find immediate solutions for deserving American homeowners.

Alan Cosgrove