Brian
Posts:2210
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| 10/07/2008 7:59 PM |
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WASHINGTON — Republican presidential candidate John McCain is proposing a $300 billion program for the federal government to buy up bad home mortgages and allow homeowners to keep their houses.
McCain said: "Until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy and we've got to get some trust and confidence back to America."
In an unusual step, McCain announced the plan during Tuesday's debate. He said that as president he would direct the federal government to purchase mortgages directly from homeowners and mortgage providers. The loans would be replaced with fixed-rate mortgages, ostensibly at a loss to the government.
"Is it expensive? Yes," McCain said.
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WTF!? McCain blamed the Democrats for the Community Reinvestment Act that allowed poor people to buy houses they could not afford... But now, he wants to buy the mortgages and let the deadbeat remain in the houses they cannot afford?
I'm not convinced that homeowners who bought thanks to the CRA are defaulting at a higher rate than the other subprime buyers. It's likely that people who benefited from low-income programs are doing just fine because they got to buy at discounted prices and were limited in their upside potential so they had no incentives to gamble on future appreciation.
I said before that I would move to Ohio and vote for McCain is the Republicans opposed the housing bailout. With this last stunt from McCain, I'm definitely voting for Obama.
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Brian
Posts:2210
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Brian
Posts:2210
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| 10/07/2008 8:09 PM |
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McCain was against the bailout before he was for it.
I like Mccain's first position much better. I'm disappointed McCain is not putting country first as he claimed he would.
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SANTA ANA, Calif. — Drawing a sharp distinction between himself and the two Democratic presidential candidates, Senator John McCain of Arizona warned Tuesday against vigorous government action to solve the deepening mortgage crisis and the market turmoil it has caused, saying that “it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.”
http://www.nytimes.com/2008/03/26/us/politics/26mortgage.html?ref=politics
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jakob
Posts:473
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| 10/07/2008 8:40 PM |
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| Yeah, McCain is clearly struggling now. He looks weak that he flip flopped on the bailout... Looks like it could be ugly for him in Nov. |
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PolarBearKing
Posts:161
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| 10/07/2008 10:30 PM |
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Doesn't matter, he doesn't have a snowball's chance in hell after tonights performance.
I'm even starting to Consider Obama. |
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Jack**
Posts:74
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| 10/07/2008 11:38 PM |
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They claim the housing debacle caused the need for a bailout. If the Feds buy the bad debt from the banks, it seems pretty reasonable for the banks to relieve the "homeowner" of theirs. Otherwise, the banks would profit twice.
I don't like it one bit and and wonder if we'll ever be able to buy a modest home with 50% down and 758 FICO while my brother might be able to keep his $700k exploding arms bubble home with a $100k income. lol.
Its easy to pick on Sen. McCain since he clearly states his plans and position - unlike Sen. Obama who talks in circles about exploring new ideas. After tonights debate we've heard 70% of SM's plans and only 20% of SO's plans. |
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Brian
Posts:2210
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| 10/07/2008 11:43 PM |
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Washington Post article
McCain's announcement that he would direct the Treasury Department to buy failing mortgages was part of an aggressive push to give him a boost on an issue -- the economy -- with which he has struggled.
The plan, he said, would turn such mortgages over to the government, replacing them with "manageable, fixed-rate mortgages" for homeowners to reduce the chances of default. His advisers circulated talking points to Republican surrogates telling them to describe it as a "bold initiative" and to call it the "McCain Resurgence Plan."
But McCain did not fully explain how he would finance the $300 billion program, other than to say that it could dip into the money recently passed in the $700 billion economic rescue package.
Nor did he explain how it would square with his promise to freeze all government spending. McCain seemed to be proposing two opposing ideas at once: paring back on the budget, through cutting defense programs and earmarks, while at the same time adding an expensive program. |
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wilson
Posts:541
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| 10/07/2008 11:45 PM |
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Jack,
The "bailout" will purchase mortgages from banks at market value, not face value. The banks don't profit, it will lock in their losses but give them working capital. I can't believe that people still don't have a clue at what was passed in that bill. |
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Brian
Posts:2210
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| 10/07/2008 11:47 PM |
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Interesting that McCain had to borrow and idea from Hillary Clinton, according to a McCain advisor.
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NY
Times - History of McCain Mortgage Proposal
The mortgage renewal idea actually originated with Senator Hillary Rodham Clinton, said Charlie Black, a senior adviser to Mr. McCain. And Mrs. Clinton, who proposed the idea in a recent newspaper column, borrowed it from a Depression-era New Deal agency, the Home Owner’s Loan Corporation.
As Mr. McCain’s campaign described his program, it would be available to mortgagors for whom the property is their primary residence, who can prove they were creditworthy when the original loan was made and who made a down payment. “Lenders in these cases must recognize the loss that they’ve already suffered,” a McCain campaign summary said.
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mydogneedsayard
Posts:23
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| 10/08/2008 4:50 AM |
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| I could not believe it when he said that. The conservatives will completely freak out over that remark. |
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rkf619
Posts:37
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| 10/08/2008 7:30 AM |
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| Talk about moral hazard! McCain wants to bail out the imprudent homeowner who borrowed (or refinanced) 100% of the value of his house while the poor guy who prudently put down 30% cash is out of luck. |
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ilivehere
Posts:128
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| 10/08/2008 9:11 AM |
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1. Countrywide is allowing people in foreclosure to refi into a loan that is 90% or current value
2.10yr interest only loan
3. After 5 years, homeowner can sell and split 50% of profit.
Talk about WTF! I put 20% down on two homes and have paid the mortgage on time for my life..These people put nothing down, could of done the right thing and did a short sale. Instead let the home go into foreclosure and now Countrywide/BofA are allowing them to stay in the house and make money on something they never paid one dime into.
If any of you are mad about anything, get mad about that. I wouldn't pay my mortgage if I had a Countrywide loan right now just out of principle.
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lurknomore
Posts:270
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| 10/08/2008 9:34 AM |
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| McErratic's "bold new plan" is already included, although probably to a smaller $ amount, in the "bailout" package already passed. But he obviously doesn't understand what he is saying: Fom whom will he buy the mortgages? Isn't it part of the "non-transparency" problem that those mortgages have been bundled and split up among many investors in CDOs and other exotic financial products? If specific, individual mortgages were held by the lenders that originated them or by specific, individual investors, it would already be easier to price them in the marketplace. It sounds good in principle(to "liberals" like me) but isn't really a doable plan and, besides, must be anathema to those less-government, moral-risk-oriented, conservative voters who are his "base." Perhaps Gidget Palin can attack him for it and really complete the confusion among conservatives! I guess Brett and Bart Maverick may be headed for a split-up. |
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Brian
Posts:2210
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| 10/08/2008 9:47 AM |
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Posted By ilivehere on 10/08/2008 9:11 AM
1. Countrywide is allowing people in foreclosure to refi into a loan that is 90% or current value
2.10yr interest only loan
3. After 5 years, homeowner can sell and split 50% of profit.
Talk about WTF! I put 20% down on two homes and have paid the mortgage on time for my life..These people put nothing down, could of done the right thing and did a short sale. Instead let the home go into foreclosure and now Countrywide/BofA are allowing them to stay in the house and make money on something they never paid one dime into.
If any of you are mad about anything, get mad about that. I wouldn't pay my mortgage if I had a Countrywide loan right now just out of principle.
The Countrywide deal is not so bad because it's private money and not money directly out of the pockets of taxpayers.
It's also a sucker's play because interest only = rent + ownership premium with very little upside potential.
The defaulters would be better off walking on the upside-down houses, rent for a while, then buy back at a low prices. If their credit is ruined, they can always ask a relative to help out.
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The McCain proposal on the other hand is money directly from the government. Never have I heard a Republican propose such welfare (ripoff of taxpayers).
I would much rather pay the college education of deserving kids with good grades than bailout those irresponsible homeowners.
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NCgirl
Posts:206
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| 10/08/2008 9:50 AM |
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Posted By ilivehere on 10/08/2008 9:11 AM
1. Countrywide is allowing people in foreclosure to refi into a loan that is 90% or current value
2.10yr interest only loan
3. After 5 years, homeowner can sell and split 50% of profit.
Talk about WTF! I put 20% down on two homes and have paid the mortgage on time for my life..These people put nothing down, could of done the right thing and did a short sale. Instead let the home go into foreclosure and now Countrywide/BofA are allowing them to stay in the house and make money on something they never paid one dime into.
If any of you are mad about anything, get mad about that. I wouldn't pay my mortgage if I had a Countrywide loan right now just out of principle.
Our loan is with countrywide. They better freakin lower my rate too! Not fair!
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huntid
Posts:64
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| 10/08/2008 9:52 AM |
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Ilivehere:
I feel just as pissed (if not more) as you. I do believe however that nothing is going to help. Deadbeats are still going to not pay and screw up. The market will suck them all down until the price is supported by what the rent would be. |
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lurknomore
Posts:270
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| 10/08/2008 10:13 AM |
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| NCgirl--Our mortgage was also originated by Countrywide (Wasn't everyone's??) as a refi in 2000. I don't expect any rate reduction from them and don't deserve one. When someone else's house is on fire, and mine is safely distant from it, I don't expect the Fire Department to douse my house with water. |
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Brian
Posts:2210
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| 10/08/2008 10:18 AM |
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McCain mortgage plan shifts costs to taxpayers
Under McCain's newly announced plan, the government would take the hit for writing down mortgage balances for at-risk borrowers.
By Les Christie, CNNMoney..com staff writer
Last Updated: October 8, 2008: 12:50 PM ET
NEW YORK (CNNMoney.com) -- Under a mortgage rescue plan announced at the debate Tuesday night by Senator John McCain, much of the burden of paying to keep troubled borrowers in their homes will shift to taxpayers.
McCain Mortgage Plan
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Martin Feldstein of the McCain campaign, an economist at Harvard, and a director of AIG, predicts that 10
million to 20 million homeowners could walk before this is over.
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Brian
Posts:2210
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| 10/08/2008 11:01 AM |
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Here is a
Fox News article to balance the CNN coverage.
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McCain Seeks Game Changer With Housing Policy
John McCain is trying to turn the race around with his new $300 billion housing policy that would have the Treasury Department buy up distressed mortgages and refinance them with new loans reflecting the diminished value of the properties.
FOXNews.com
Wednesday, October 08, 2008
McCain's plan is a departure from his longtime position of limited government spending -- he once questioned whether federal money should be spent to help homeowners
But McCain made a similar housing proposal earlier this year and eventually supported the Homeownership Act, which took effect Oct. 1 and expires in September 2011. It is expected to help as many as 400,000 homeowners avoid foreclosures over the next three years. The legislation was crafted by House and Senate Democrats.
Contrary to McCain's plan, it required lenders to take a loss by writing down the principal on troubled mortgages to 85 percent of the house's current value. Borrowers with sufficient incomes and credit records would then qualify for refinanced mortgages from new lenders.
Taxpayers are estimated to be pay about $20 billion for the program, which used government funds only to help finance mortgage insurance for the new loans.
Most Republicans and Democrats have rejected the premise of McCain's proposal because it could reward the irresponsible lending and borrowing practices that caused the housing crisis while doing little to help struggling but conscientious homeowners. |
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tpc
Posts:498
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| 10/08/2008 11:20 AM |
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| Who said McLame wasn't a maverick?????? |
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