McCain's Plan to Buy Troubled Mortgages

[jsteele]

Anonymous wrote:Didn't the government do the same thing during the depression? They bought up homes. I think the point is to keep people in their homes. If people are foreclosed on it creates a whole new set of issues for the government and the community to deal with, namely homeless, welfare, poverty. I am not saying the plan is perfect and that people should not be angry, but the feds are looking at the larger people. And in the long run the government makes money off of these loan, thus creating revenue for the country.

The point you are missing that existing law already provides a mechanism to transition home owners into a FHA loans, but it requires the lender to eat some of the original, now over-valued, mortgage. McCain's plan changes things so that taxpayers pay instead of the lender. McCain's plain is not aimed at helping home-owners, but irresponsible lenders.

[Anonymous]

Anonymous wrote:Didn't the government do the same thing during the depression? They bought up homes. I think the point is to keep people in their homes. If people are foreclosed on it creates a whole new set of issues for the government and the community to deal with, namely homeless, welfare, poverty. I am not saying the plan is perfect and that people should not be angry, but the feds are looking at the larger people. And in the long run the government makes money off of these loan, thus creating revenue for the country.

Go to realtytrac.com.
DC currently has 2119 [also shows a few others entered on the site as for sale or for sale by owner]:
pre-foreclosure 611
auction 528
bank owned 885
govt owned 5

If the point is to keep people in their homes then it is totally absurd when/if they couldn't afford the home in the first place. One fact is that J McC 's idea is to provide that bail out to those who would have qualified for normal fixed rate conservative loans ON THAT HOUSE and amount when the initial contract was signed. Verifiable income. Far different than the situation in Manassas, Herndon, etc where people with no verifiable income bought and ran illegal boarding houses.

I do believe they should still owe the amount of the purchase price --- just reset the loans to a fixed rate. Not an artificially low fixed rate --- no eating of costs for taxpayers.

[Anonymous]

Hell no, it's not fair. Nor is it good for the economy. Why can't they treat bad mortgages like student loans, which are also guaranteed by the government? You still owe the entire amount that YOU borrowed, and at the interest rate available when you borrowed it, but you can get your payments adjusted to a comfortable amount for your income. If you pay less per month because that's all you can afford, it just means that you'll be paying forever, and paying a much higher total amount in the end. But no way are you off the hook for the principal amount, unless you join the military, or the Peace Corps, or Teach for America, or something. Perhaps they could offer a similar deal to irresponsible homeowners: reduce the principal if you volunteer to work for the government for free or low wages. Maybe they could all work on some kind of Habitat for Humanity-type program, building houses for people really in need...

[Anonymous]

Anonymous wrote:i think i heard that if they got the new lower valued mortgage, at the time of settlement they would owe 50% of then appreciated value back to the govt....? so - they didn't get to keep it all.

Still theft.

[Anonymous]

The subprime mess is not limited to the poor uncreditworthy losing their homes. What about those who are in McMansions on an ARM loan? Are they going to be bailed out on their $1 million - $2 million homes, too?

I think McCain would renege if he won the election.

[jsteele]

Obama opposes McCain's plan now that the details have been revealed: