McCain proposes bailout for homeowners

[Danny White]

:bang2:
McCain proposes bailout for homeowners
By POLITICO STAFF | 10/7/08 9:34 PM EDT

Here are details of the plan Sen. John McCain (R-Ariz.) announced during Tuesday night's presidential debate "to keep families in their homes, avoid foreclosures, save failing neighborhoods, stabilize the housing market and attack the roots of our financial crisis":

AMERICAN HOMEOWNERSHIP RESURGENCE PLAN

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 restructured to put losses on the books and put homeowners in manageable mortgages. Lenders in these cases must recognize the loss that they’ve already suffered.

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.

[Heisenberg]

I don't really get this either. I'm for renegotiating mortgages, but to buy all the bad ones up? I don't think that's a necessary step. It's too much like the $700 billion dollar bailout we just passed.

[Big Dakota]

http://cowboyszone.com/forums/showthread.php?t=131190

Lookie Lookie who wants a bialout for the bailout:laugh2:

[JBond]

http://cowboyszone.com/forums/showthread.php?t=131190

Lookie Lookie who wants a bialout for the bailout:laugh2:
Not quite. He said he would take the money from the current $700 billion the Sec. of the Treasury controls and rewrite the crazy loans to something more realistic based on the condition of the overall market.

Nice try.

[Danny White]

Not quite. He said he would take the money from the current $700 billion the Sec. of the Treasury controls and rewrite the crazy loans to something more realistic based on the condition of the overall market.

Nice try.

I didn't hear him say it directly... he wants to use the bailout money for this? I didn't see anywhere where he said where the money would come from to fund this.

That's slightly less bad if true... but is he allowed to do that? Isn't the money already allocated?

I'm confused.

[Heisenberg]

I didn't hear him say it directly... he wants to use the bailout money for this? I didn't see anywhere where he said where the money would come from to fund this.

That's slightly less bad if true... but is he allowed to do that? Isn't the money already allocated?

I'm confused.

I never heard that either nor is it actually outlined in the policy stuff that I've already read on it.

Plus, the 700 billion dollar bailout is already been signed off on. How would you go back and say hey, 300 billion of that is going somewhere else that wasn't agreed on when the bill was signed?

[JBond]

I never heard that either nor is it actually outlined in the policy stuff that I've already read on it.

Plus, the 700 billion dollar bailout is already been signed off on. How would you go back and say hey, 300 billion of that is going somewhere else that wasn't agreed on when the bill was signed?

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.

I was just reading the original article.

[Danny White]

Is McCain getting advice from this guy?


http://www.famousplagiarists.com/images/leskomatthew.jpg

Free Money to pay your mortgage!


http://bp0.blogger.com/_-rFiy3sEaT4/RoPQrFYrPPI/AAAAAAAAAHo/ygzjmQr3kms/s400/Matthew+Lesko.bmp

http://bp3.blogger.com/_FfKrUY_D6Lg/RjjlnCN9WwI/AAAAAAAAARo/HyTzGtGOyus/s320/lesko.jpg


Actually, I think I read this guy is an Obama supporter. Makes sense I guess...

http://deadcantrant.com/shared/images/photo.matthew_lesko.gif
Free Money to pay your hospital bills!

[Danny White]

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.

I was just reading the original article.

Got it. Getting too late I guess. Gotta go to bed.

[Heisenberg]

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.

I was just reading the original article.

Ah. Got it. So it could potentially come from the 700 billion bailout bill. Not as bad as originally thought. I still think it's somewhat unnecessary. I mean, renegotiate, yes, but to buy up more bad debt? Not so sure.

Edit - And thinking about it a little more, it says they can use those funds. It doesn't say they absolutely will. The fact that there are some that are saying the $700 billion may not be enough to correct the problem we already have and adding $300 billion to it, eh. I'm just not sure. It seems like throwing more money at the issue when it's already looking like throwing money at it might not fix it.

[StevenOtero]

Is McCain getting advice from this guy?


http://www.famousplagiarists.com/images/leskomatthew.jpg

Free Money to pay your mortgage!


http://bp0.blogger.com/_-rFiy3sEaT4/RoPQrFYrPPI/AAAAAAAAAHo/ygzjmQr3kms/s400/Matthew+Lesko.bmp

http://bp3.blogger.com/_FfKrUY_D6Lg/RjjlnCN9WwI/AAAAAAAAARo/HyTzGtGOyus/s320/lesko.jpg


Actually, I think I read this guy is an Obama supporter. Makes sense I guess...

http://deadcantrant.com/shared/images/photo.matthew_lesko.gif
Free Money to pay your hospital bills!:lmao:

[Maikeru-sama]

I still don't understand what is so wrong with Apartment Complexes.

When you take on a Mortgage, you are assuming all the good (tax breaks and equity) and the bad (inability to pay in the future) that comes with it.

But I do admit, I would rather see the money go to a regular joe than seeing it spent on AIG, as we all found out what they do with our money.

Why does every American feel entilted to have a house, a dog and 2 kids. Folks need to realize that sometimes that isnt in the cards for them or there are risks and sacrifices that come along with it.

[burmafrd]

You first must show that you can pay for it. The Dems forced the banks to loosen all the previous rules by claiming they were racist, etc. That was the first big step in this mess. those rules were financial rules designed to see to it that nothing like this would happen. the dems did not care- they just wante to buy more votes.

[Heisenberg]

It's now being pointed out by a few people that this plan was already in the bailout proposal.

Figures.

[Heisenberg]

Woops:

http://www.marketwatch.com/news/story/mccains-bold-new-mortgage-plan/story.aspx?guid={6233F720-ADBD-49CC-AFD0-52407D80822D}

McCain's bold new mortgage plan isn't new
Commentary: Sounds like he still hasn't read the Paulson plan
By MarketWatch
Last update: 11:58 p.m. EDT Oct. 7, 2008
WASHINGTON (MarketWatch) -- John McCain proposed a bold new idea to save America from the worst financial crisis in 70 years: Have the federal government buy bad mortgages and modify them to keep people in their homes.
Except his idea isn't so new; it's part of the $700 billion bailout package approved by the Senate and signed by the president last week.
It was all over the news. Right in between the stories about the Dow crashing 1,700 points and the campaign ads about Sen. Barack Obama's terrorist pals.
At the second presidential debate on Tuesday, the very first question the two candidates were asked was on how they would help ordinary citizens weather the crisis. See full story.
Obama started off, going directly into his stump speech, saying the downturn was the "final verdict on the failed economic policies of the last eight years," and then listing all the things he'd do for the middle class.
When his turn came, McCain said he'd protect home values by ordering the Treasury secretary to "immediately buy up the bad home loan mortgages in America" and renegotiate the terms so people could stay in their homes.
"I know how to do that, my friends," McCain said. "And it's my proposal, it's not Sen. Obama's proposal, it's not President Bush's proposal."
The problem, of course, is that it is President Bush's proposal. At least, it's Treasury Secretary Henry Paulson's proposal. It's the heart of the $700 billion plan.
According to Section 110 of the law, the government is going to buy up "troubled assets," including residential mortgages, and then do everything it can to "minimize foreclosures" by modifying the terms of the loans by reducing interest rates, reducing the principal or "other similar modifications."
After McCain suspended his campaign two weeks ago and rushed back to Washington to knock some heads together to get a rescue plan approved, he sheepishly admitted that he hadn't actually read the three-page Paulson plan all the way through. And even though he voted for it, it sounds like he still hasn't read it.

[Beast_from_East]

Not quite. He said he would take the money from the current $700 billion the Sec. of the Treasury controls and rewrite the crazy loans to something more realistic based on the condition of the overall market.

Nice try.

I dont think you are correct. They are saying on TV that this is an ADDITIONAL $300 BILLION.

This is new money, not part of the $700 billion package that was just passed. At least that is what they are saying on TV, maybe the analyst misunderstood?

If the analyst is right and this is new money, I dont see how this plays with the Republican base very well. Wasnt it all the House Republicans that were against the first bailout because it was "socailism"?

[burmafrd]

So you WANT to believe the Media when they say something bad about McCain but not when they say something (occasionally) bad about Obama?