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McCain’s Mortgage Buyout Plan

October 8, 2008

Michelle reports:

AMERICAN HOMEOWNERSHIP RESURGENCE PLAN

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.

just think. obama’s health care. obama;’s health care. obama’s health care

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One comment

  1. Bailout plan sure…but he’s not going to win with that.

    McCain should take the Flat Tax, wrap it around this financial crisis, and punt.

    The financial collapse and excessive bailout just may be the perfect storm. A very strong argument could be made that our current tax code created this problem (it did). The Flat Tax would eliminate “the game” being played up top with our tax dollars that got us into this financial mess. It’s real reform. It’s massive reform. It’s the silver lining around this dark cloud we’re in.

    This idea would wipe Obama’s lame tax cut for the middle class off the proverbial map…and void all his other lame socialist ideas.

    The Flat Tax is the shot of penicillin the USA so badly needs. SPREAD THE WORD. Learn more: http://www.heritage.org/Research/Taxes/bg1866.cfm



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