McCain wants to spend $300 billion more to buy up bad mortgages

michellemalkin.com ^ | 10/7/08 | Michelle Malkin

[jddqr]

I can’t underscore enough what a rotten idea John McCain’s ACORN-like government mortgage buy-up is. I said it during my liveblog. And I’ll say it again: “HE WANTS TO EXPAND THE BAILOUT. He wants to do what ACORN wants to do. We’re Screwed ‘08.”

This was his supposed “game-changer.” This was the very first thing out of his mouth during the debate tonight — his big pitch right off the bat. The McCain campaign immediately sent out this fact sheet on the proposal, which will cost at least $300 billion. The proposal involves directing the Treasury Secretary to “purchase mortgages directly from homeowners and mortgage servicers.” That’s on top of the trillion-dollar crap sandwich, the $85 billion to AIG, the $25 billion to automakers, the $200 billion in capital and credit lines to Fannie and Freddie, and who knows what else we’ll be forking over to California, Massachusetts, etc., etc., etc.

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.

[Murder Incorporated]

“I understand how you feel, but these morons like Malkin need to stand back and take a careful look at the man they are helping to get into office, Barack Obama.”

Maybe you should stand back and take a careful look at the man that you are helping redefine conservatism and the GOP brand. What happens when come January, there is no center-right party?

[TADSLOS]

McCain just threw down a desperation bribe to the “undecided” American electorate at the American taxpayer’s expense.

[anniegetyourgun]

Thanks for making my point...again.

[dfwgator]

That’s it!!! I am officially voting for “None of the Above”.

[af_vet_rr]

Is it just me or do we have to chose between two very bad candidates?

Nope, it's not just you - I'll never vote for Obama, but McCain sure is making it hard to vote for him - it took me a while to come around to McCain (and the only reason is because I despise Obama).

It makes me angry that McCain and Palin talk about mistakes Bush made and how much the government grew under Bush and how they would change that, and then McCain turns around and says he'll get the government even more involved (and make it larger) with this crap. And you know it wouldn't stop at $300 billion because he and his advisors (Phil Gramm among them, one of the fools who pushed the legislation through that Billy Clinton signed, along with Carly Fiorina, the woman who managed to run a good company very nearly into the ground plus assorted lobbyists), you know none of them have a clue how big this will ultimately be.

These days, between the Democrats and Republicans, it feels like we choose between Socialism or Socialism-lite.

[af_vet_rr]

McCain just threw down a desperation bribe to the “undecided” American electorate at the American taxpayer’s expense.

That's the worst part of all of this - a lot of the bailout stuff is being done because we have elections this November.

Of course, as much as we bash the politicians, they wouldn't be doing it if our society wasn't so easily bribed.

[rabscuttle385]

and most likely then sells the property later on at a profit.

If Government can make an "investment" in buying depressed properties, then why not make "investments" and nationalize whole companies?

Oh wait, I forgot...they already did that with AIG.

[PugetSoundSoldier]

Because first, the government isn't in the real estate business. Owning that much real estate makes it a major player in the market.

REALLY? Have you ever heard of the Bureau of Land Management, and the 264 MILLION acres they control? Or any of the Federal office buildings, military bases, and airports? The US Federal Government is the LARGEST owner of real estate in the US, by far. You might not like them in that position, but since the founding of the country they've controlled most of the land in the US.

Secondly, the market is not likely to go back up- this is a major adjustment, and all real estate is likely to take a major hit, especially in troubled over-priced areas where the majority of the mortgages reside (California, as an instance).

So 30 years from now, the real estate prices will still be low like they are. That is good to know. I mean, 40 years ago when my mom bought her house in Seattle it was only $14,000. When she sold in 2000 it was $210,000. Last year it sold again for $540,000. Now it's probably back to $390,000. Good to know that it will never again crack $400,000!

Real estate is the ONE investment that always goes up. Land is the one thing that we can't really make more of, and with more and more population you have more people looking to acquire a fixed asset.

It may take 15-20 years, but those prices will rebound. And considering how we are looking at mortgages that are barely into their 30 year payment terms, we have time. The price will come back. Just like the DJIA - any 10 year period in the history of the DJIA shows an increase - including the Great Depression.

[antisocial]

I don’t appreciate the shouting this morning! Yes I have a hangover.

[rabscuttle385]

There is no comparison of McCain to Obama.

McCain is to Obama as Chamberlain is to Hitler...or FDR is to Uncle Joe Stalin.

Regardless of whether he's just as bad, McCain has had no problem enabling Obama et al. by "crossing the aisle" to sponsor and to champion amnesty, climate change, bailouts, etc. with them.

Even if McCain wins, Obama will still be in the Senate, making mischief there.

[EternalVigilance]

* You cannot bring about prosperity by discouraging thrift.
* You cannot strengthen the weak by weakening the strong.
* You cannot help little men by tearing down big men.
* You cannot lift the wage earner by pulling down the wage payer.
* You cannot help the poor by destroying the rich.
* You cannot establish sound security on borrowed money.
* You cannot further the brotherhood of man by inciting class hatred.
* You cannot keep out of trouble by spending more than you earn.
* You cannot build character and courage by destroying men’s initiative and independence.
* And you cannot help men permanently by doing for them what they can and should do for themselves.

- William J. H. Boetcker, 1916

[EternalVigilance]

There is no conservative running for president, so I won’t be voting in that race.

Alan Keyes is a qualified write-in candidate in Texas.

I'll be writing him in here in Iowa.

[Sunnyflorida]

You are mixing terms “value” and “price”. They are not the same thing. Read Thomas Sowell for a detailed explanation.

Also the “crisis” is not about house prices but the ability to pay a mortgage. Lowering prices will not help. If the potential selling price of a house goes up or down it does not help you make payments if you were stupid and got in over your means.

House prices need to come down to a level where buyers will step in. It is happening here in FL - my part. Resale prices are moving back up off the bottom for properties in prime locations - and some not so prime ones.

One other thing speaks to a strong natural stabilization and that is the amazing increases in building permit costs and building material prices. I doubt we see new supply coming online anytime soon. If you have money and are a good researcher I bet you can get some good property for prices that you could not touch a few years ago. This is a buyers market and all the local banks here are lending 6% fixed, 20% down with supportable income.

[Williams]

Yes, I know what I am saying so please listen for a minute. The whole point of the “bail out” was to take bad loans off lenders’ books, and off the books of companies that invested in the mortgages.

All McCain was saying, and which the bail out bill has already authorized, is to take some of the bad mortgages directly from the homeowners. The lenders get paid off to whatever extent the bail out would have paid them off anyway. The homeowner gets a new mortgage for the current value of the home.

Further, McCain has not called for spending $300 B on this. He supports using SOME of the bailout fund for this. The $300B is someone’s calculation of what it would cost to buy up every bad mortgage and eat the loss.

As for appraisals, they are based on the market. There would be no housing market without them.

[af_vet_rr]

It still doesn't address the fact that a lot of people bought homes they couldn't really afford and are being enabled by the government to keep them.

Furthermore, the standard has been set by President Bush and by Congress that anytime in the future when large numbers of people do something stupid or companies take foolish risks, that they will be bailed out by the government.

The Texas Attorney General is even saying that the bailout is helping people to achieve the American dream (which I guess now includes buying stuff you can't afford).

[Williams]

Can’t argue with your observations, nonetheless the housing market is a disaster and McCain’s plan woukd stabilize it. The loss on these mortgages exists and can’t be avoided. It doesn’t really help if people walk away from the houses, because that dumps excess homes on the market.

Don’t really disagree with you either. The markets need to correct.

[Sunnyflorida]

“The whole point of the “bail out” was to take bad loans off lenders’ books, and off the books of companies that invested in the mortgages.”

It was not. It was to create a pool of mortgages. The Bailout is to create liquidity for the derivatives and CMOs, SIVs CDSs. Not individual mortgages. Do you know the difference?Not to hold them. The Bailout is about liquidity not creating assets.

“McCain has not called for spending $300 B on this. “

You are wrong. This is new money.

I agree appraisals are market based. Some other poster suggested they should be set by other means. The problem with appraisals is they are not forward looking. OK in an up market not so good - LOL - in a down market.

[af_vet_rr]

Can’t argue with your observations, nonetheless the housing market is a disaster and McCain’s plan woukd stabilize it. The loss on these mortgages exists and can’t be avoided. It doesn’t really help if people walk away from the houses, because that dumps excess homes on the market.

Don’t really disagree with you either. The markets need to correct.

Yeah...all the bailout stuff is doing is delaying the inevitable, possibly spreading it out. There still needs to be a correction, especially in the housing market. Hopefully if we see housing prices drop back to reasonable prices, the property taxes should drop as well. A lot of people who bragged about rising home values as a good thing were conveniently ignoring the fact that property taxes were rising as well, which eats into any kind of profit you think you can get.

[Sunnyflorida]

“The whole point of the “bail out” was to take bad loans off lenders’ books, and off the books of companies that invested in the mortgages.”

It was not. It was NOT to create a pool of mortgages. The Bailout is to create liquidity for the derivatives and CMOs, SIVs CDSs. Not individual mortgages. Do you know the difference? Not to hold them. The Bailout is about liquidity not creating assets.

“McCain has not called for spending $300 B on this. “

You are wrong. This is new money.

I agree appraisals are market based. Some other poster suggested they should be set by other means. The problem with appraisals is they are not forward looking. OK in an up market not so good - LOL - in a down market.

[Sunnyflorida]

Here is another problem with McCain and his little NEW House Bailout. McCain is not the President. He is a Senator. Paulson and crew are well down the path to start buying and selling these toxic assets. There is no provisions in this to value individual homes or even mortgages or that will be priced and “cleared” through the system. The toxic assets that are not trading that the Bailout are CMOs, SIVs, CDSs, etc. There is no provision for an Fed MLS. LOL

Again, The TARP is NOT buying individual mortgages. Can you understand that. TARP will easy put all $700B to work doing its clearing job.

So McCain would have to have Paulson and crew report to him to set up a way to “clear” mortgages. That is not what is happening and could not happen until Jan 20 at the earliest. If McCain wanted this why did he not push for it during the debate on the bill.

McCain is so clueless you have to wonder.