CRAZY MCCAIN AND HIS MORTGAGE DEAL

boblonsberry.com ^ | 10/09/08 | Bob Lonsberry

[shortstop]

John McCain is insane.

I’m still voting for him, but he’s out of his freaking mind.

I’m talking about his new wrinkle on the bailout fiasco. As if it and its accumulated crud weren’t enough of an offense, he’s figured out a way to make it even worse.

He brought it up at the debate.

Proud as a peacock, in response to the first question, he popped out his new plan. On the night he needed to draw blood – or make vacation plans for January 20th – the best John McCain could do was try to out-socialist Barack Obama.

And that’s a pretty tall order.

But John McCain pulled it off.

Here are the details. John McCain said that, if elected, he will have the government buy up all these troubled mortgages. Then he would have them renegotiated, lowering the amount of indebtedness to the current market value of the mortgaged properties. That would lower – probably dramatically – the amount owed and the interest rate paid.

And it would screw the country.

Which seems to be a pretty bipartisan objective.

Let’s think through what would happen if Insane Johnny got his way.

First of all, American taxpayers would get beaten from pillar to post. Just a week after the liars promoting this bailout told us that the government would probably make money on it, by reselling the mortgages after they appreciated in value, my candidate decided to make it so that the government – by which I mean “the taxpayer” – would lose money on each and every mortgage.

Here’s how. If you buy it at a price that reflects the total amount owed, and then you reduce the total amount owed – and consequently the amount paid back – you lose money. The government absorbs the difference between what it buys the mortgage for and the price it then reissues the mortgage at – it just writes it off. It is an immediate and certain loss which will not be made up, no matter what happens to the market.

You don’t buy a $10,000 car and then resell it for $8,000 and get good grades in your MBA class.

That’s Major Flaw No. 1.

Major Flaw No. 2 is that the plan rewards irresponsibility. If you were dumb, crooked or greedy enough to buy more house than you were willing or able to pay for, John McCain would save you by giving you the house at a price lower than what it cost when you moved in.

Say you live in a neighborhood where homes went for $300,000 two years ago when your neighbor, who delivers pizzas for a living, moved in. Surprise, surprise, he’s delinquent on his mortgage. And the economy is in the toilet, and the most you could get for a house in the neighborhood right now, if you had to sell, is $150,000.

Enter Nut Job Johnny.

He would take your bum neighbor, who is defaulting on a loan for $300,000, and save him from foreclosure. Further, he would reissue the loan for the current value of the property -- $150,000.

I’m not sure if you know this, but the mortgage payment on $150,000 is a whole lot less than the mortgage payment on $300,000. And, in the midst of a financial crisis, the interest rate is a whole lot lower.

So your punk neighbor is living in the same neighborhood and size house as you are, only he’s making a far smaller payment with a far smaller debt, all because of John McCain. And the fun part is that you, paying the whole freight on your home, are going to be taxed to pay for it all.

Those who make their mortgage payments will be taxed to pay for those who don’t.

And we don’t even want to get into how many of these defaulted-on homes were “bought” by illegal aliens or as part of social engineering programs intending to increase home ownership by the unemployed and welfare dependent.

But I digress.

Bonkers McCain will not only bail out these failed buyers, he will give them new mortgages at bargain-basement prices.

But wait, there’s more.

What happens when the value of homes goes back up? Let’s say in five years, when the economy gets back on its feet, the homes in your neighborhood regain their value, and are selling for $300,000 again, what happens?

Well, you – who kept your word and paid your mortgage – will sell yours for $300,000 and walk away even. And your neighbor, who defaulted and got the new mortgage at the bottomed-out price, will also sell for $300,000 – and make $150,000 on the deal.

Thanks to John McCain.

But wait, there’s more.

There’s still Major Flaw No. 3.

And that is that anybody with half a brain – and no conscience – watched the debate and decided to stop paying their mortgage.

Seriously. The value of your home right now, in most parts of the country, is less than what it was when you bought it – less than what it was when you took out your mortgage.

So stop making your payments. Fall behind a little bit. Become a troubled mortgage. In a few months, the government will rescue you.

And John McCain will give you a new mortgage, for the depressed value of your home. It’s like saving tens of thousands of dollars at the stroke of a pen. All you and McCain have to do is rip off the taxpayers.

Apparently, he’s perfectly willing to do so.

Repeating, for emphasis: People who paid their mortgages will labor under higher taxes and government debt. People who didn’t pay their mortgages will get a giant gift from the government.

Responsible people will be punished and irresponsible people will be rewarded. The people who contribute to America get hosed and the people who tear down America get to raid the Treasury.

Thanks to John McCain.

As if the bailout con job wasn’t bad enough, Crazy Johnny found a way to make it worse.

But I’m still voting for him.

Because I’m pretty adept at picking the lesser of two evils. And the idiot who wants to give people welfare mortgages is a little bit better than the idiot who thinks health care is a right. One will tax me to give my lazy neighbor a house nicer than mine, and the other will tax me to pay for people who are so lazy they won’t even work to hire a doctor to take care of their families.

In closing, let me be one more person to observe: In a country of 300 million people, how in the heck did we end up with these two idiots as our presidential candidates?

[shortstop]

McCain makes Bob Dole look like an all-star presidential candidate. If not for Sarah, I don't think I'd bother to vote this year.

[cripplecreek]

LOL

[rabscuttle385]

He ain't called McInsane and McQueeg for nothin'!

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[SwankyC]

Bob has been disappointing me lately. What he missed - and Glenn Beck told me this - is that Paulson already has the power to do what McCain is proposing and they dont have to ask us peons $hit. Apparently it's already in the bailout bill in seections 109 and 110. I have not verified this myself.

I'd say I'm disappointed in McCain, but ... Yea well read the tagline.

[Kackikat]

McCain and Palin explained that idea on Hannity interview yesterday...it was to get these people out of sub prime variable mortgages into fixed rate mortgages, and if I understood correctly it was the mortgages being purchased by the bailout..?? They will be responsible for that program if elected. It made sense to me...it’s the variable mortgage that keeps climbing that’s putting people into bankruptcy.

[VaRepublican]

Roger that, if not for Sarah then I would not even be voting for pres. Of course I’ll do what I can in my state politics but J McCain is still not the answer.

[mysterio]

I’m talking about his new wrinkle on the bailout fiasco.

Actually the power to buy up all of those mortgages is in the bailout bill itself. Apparently McCain didn't read it. Not surprising. Those of us who did read it were completely against it.

[Perdogg]

people are misleading the public on this.

[HappyinAZ]

Biggest finnancial melt-down in the history of the world with still an 70% chance of forcing a Great Depression....EVERYONE has ideas....that’s the kind of land we live in.....and since McCain’s never published the details of his ideas...this is all ranting, spewing and negative speculation.

[stuartcr]

I don’t think I will vote this election.

[Military family member]

I attended a roudtable yesterday on the bailout crisis. One of the speakers, a bank president and fellow Republican, said that he's being told by federal bank examiners that he should go ahead and issue mortgages to people with credit ratings as low as 570 and that the Government will back these mortgages.

So as the government bailouts out one end, it dumps the water back at the other end.

[tbpiper]

J McCain is still not the answer...

Absent Sarah Palin, you would then consider Obama (and all that goes with him) to be the answer?

[cripplecreek]

Won’t it be ironic if responsible buyers like myself end up losing our homes due to an inability to pay taxes used to pay for homes of irresponsible people?

[autumnraine]

“John McCain is insane.

I’m still voting for him, but he’s out of his freaking mind.”

HAHA! My sentiments exactly.

The alternative to Crazy John McCain is way too much to think about it, but boy this was a crazy idea of his! Who the heck is trying to pander to?

[Sunnyflorida]

“I understood correctly”

You did not. You got it wrong.

[shhrubbery!]

What he missed - and Glenn Beck told me this - is that Paulson already has the power to do what McCain is proposing and they dont have to ask us peons $hit. Apparently it's already in the bailout bill in seections 109 and 110. I have not verified this myself.

I thought, when I heard McCain "announce" this deal in the debate, that this was already part of the Congress/Paulson deal too.

IIRC that bill provided for judges to "renegotiate" mortgages ... pretty shocking - and, I would think, unconstitutional.

I haven't seen the details yet either. Some commentators were saying the McCain version is an idea originated by Martin Feldstein, who is supposed to be a conservative economist.

But either way, isn't this the gov't cancelling private contracts? Which I thought was unthinkable in our country -except in the case of fraudulent contracts. (Is the gov't now going to claim that merely stupid deals were "fraudulent"?)

[HappyinAZ]

Federal Bank Examiners are at the bottom of the bureaucratic food chain....I sure wouldn’t “take THAT to the bank”...(hahahahahaha)

[RockinRight]

I thought this was a poorly-executed explaination of something already in the bailout bill.

[adorno]

Well, you – who kept your word and paid your mortgage – will sell yours for $300,000 and walk away even. And your neighbor, who defaulted and got the new mortgage at the bottomed-out price, will also sell for $300,000 – and make $150,000 on the deal.

That 150,000 dollars gain for the "defaulting" neighbor, that's not exactly a loser for the country.

That would, when the house is sold, be a boost for the economy. More spending money equals more activity in the economy and more business income and more jobs. Even if the person invests it in a new home, that itself equates to more economic growth.

So, we might end up losing in one end, but gaining in the other.

[St. Louis Conservative]

This is what I’m talking about when I worry McCain may “ruin” Sarah. I don’t want her associated with craziness like this.