The bailout does not allow renegotiation of loan terms. The rats have proposed to give judges the power to renegotiate loan terms. I think that McCain agrees with the rats in principle about renegotiating loan terms. I think it is disasterous policy. Everyone behind on a mortgage will now feel that they should have new loan terms. We may be seeing the end of the mortgage market. Mortgages will be turned into a government subsidized program like student loans.
McCain didn’t advocate allowing re-negotiation of mortgages that are owned by investors, but the ones that are purchased by the Treasury. Not saying I’m for it, just saying there is a difference.