Posted on 10/08/2008 10:55:58 AM PDT by Eurotwit
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 re-structured 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.
Good by Ditech and Lending Tree. Hello Uncle Sam Mortgage and Loan.
At least that way we can eliminate the middle man. We can then use the IRS to collect on bad mortgages and to prosecute people who lie on their loan applications (which I suspect was about 90% of these bad loans).
Homeowner Resurgence Plan AKA Lets Prop Up the Housing Market
Sorry but if they have worked hard enough to truly finance home ownership, they don't need my (and other tax payers help). I can barely afford my own home. I sure can't afford both theirs and mine!
"To each according to his needs, from each according to his ability" comes to mind!
DAMNIT! I KNEW I shoudl have bought a frigggin really nice house i couldn’t afford, right on the ocean!
AKA Let's Bail Out Dirtbags.
The McCain resurgence plan would be available to mortgage holders that:
SNIP
* Can prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment).
_____________________________
That’s racist.
“DAMNIT! I KNEW I shoudl have bought a frigggin really nice house i couldn’t afford, right on the ocean!”
Did you read this? It says it would be limited to people who were qualified for the loan in the first place.
There’s a pretty big “IF” in this. “IF” the mortgagee can prove his credit worthiness AT THE TIME OF THE FIRST MORTGAGE. Most of those subprime loans were baded on “stated income”.
I can’t believe the McCain camp would post this communist plan on his website for voters to see. This moron has NO shame.
A McCain aid said this morning according to Rush that he got the idea from Ms. Clinton.
How do we get Palin on top of the ticket?
I guess I can cancel my identity theft policy. What difference does it make if someone steals my name and I end up with a bad credit rating? Under communism we are all treated equally, right?
A house of cards...
Anybody know where I can get one of those new McCain/Palin yard signs everybody’s talking about?
You know, the ones that read; “From each according to his ability, to each according to his need”?
Just so I understand...what he’s proposing is if you’re in foreclosure the govt will force the lender to revalue the house and perhaps the interest rate so you can stay in the house. Who takes the valuation hit...the lender govt or??? Do I have that right?
The lender takes the hit. I’m sure there will be more than one lender that will take this to the SC. I don’t see where the government can come in and void a binding contract without proving fraud.
My idea was to get the lender to refinance at a lower rate and the government guarantee it. Then if it defaults the government takes it and evicts the “buyers” and sells it. At least the lender would have to try it one more time before we bailed them out.
Besides this being a lousy idea, the press release is very confusing.
“The McCain Resurgence Plan would purchase mortgages directly from homeowners and mortgage servicers...”
How do you purchase a mortgage directly from a homeowner? Homeowners don’t own the mortgages, the lenders do.
Also, do the servicers have the authority to sell the mortgages to the government at reduced rates, or do the lenders, or some mysterious unknown party or group of parties who own the securities the loans were rolled into?
I am also having trouble reconciling these two points:
“For those that cannot make payments, mortgages must be re-structured 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.”
and
“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.”
So who is taking the loss? The goverment or the lenders? The first line implies that the lenders would be paid a reduced amount, while the second implies the full mortgage balance would be paid off.
What does “recognize the loss they have already suffered mean”? Does it mean they eat only the overdue payments or the difference between the amount of the mortgage and the current market value of the home?
Also, what happens if a homeowner gets his “negative equity” wiped out, and then a few years later, after the housing market (hoepfully) rebounds sells the home for more than the amount of the reworked mortgage? Does the homeowner get the profit, the lender, the government?
It seems like they threw this plan together after McCain proposed it last night.
McCain can sprinkle taxpayer money around with the best (worst) of ‘em. Reduce spending? LOL!
The way I understand it is the “buyers” get to keep the homes and the equity if there is some down the road. If the government came to me and said, “We’ll get you a lower payment but when you sell it you give us the money” I’d have to pass. That’s no different than renting.
So those of us who paid off our mortgages now have to shoulder the burden of those who should never have gotten a mortgage in the first place.
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