McCAIN – WE’LL BUY THE BAD MORTGAGES – WHAAAT?

I have to admit when I heard McCain spout his line of political pandering during Tuesday night’s debate, I did a double take. And, apparently, so did many in his own party.

Editors of the conservative National Review – an influential bastion of conservative thought – trashed the plan as “creating a level of moral hazard that is unacceptable” and called it a “gift to lenders who abandoned any sense of prudence during the boom years.”

Michelle Malkin, the shrieking conservative blog mistress, went one step further, calling the plan “rotten” and declaring on her blog, “We’re Screwed ’08.”

But Conservatives are upset about more than just the “plan.” It was the way in which McCain opened his mouth and inserted his foot. As McCain wandered around the stage trying to think of something in response to a question, he threw out the idea that the government should step in and buy back bad mortgages in order to restructure them and institute lower interest rates.

Photo credit: CNN Politics

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I guess it isn’t enough that the government just voted to bail out a bunch of mismanaged corporate hotshots, now McCain wants to use more taxpayer funds to bail out homeowners who got in over their heads. He has become one loose cannon, and I bet those in his party are wondering just what he will say or do next to try to buy off the American voting public.

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About Charlotte A. Weybright

I own a home in the historical West Central Neighborhood of Fort Wayne, Indiana. I have four grown sons and nine grandchildren - four grandsons and five granddaughters. I love to work on my home, and I enjoy crafts of all types. But, most of all, I enjoy being involved in political and community issues.
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11 Responses to McCAIN – WE’LL BUY THE BAD MORTGAGES – WHAAAT?

  1. rjjrdq says:

    There’s blame to go all around. The fact is, both of these clowns voted for the bailout. And they both pander. God do they pander…

  2. Jim Wetzel says:

    I don’t know why there’s this sudden furor over Sen. McCain’s “keep ’em in those houses, no matter what” scheme. When I was in Massachusetts back in July, and he did some sort of fundraiser / rally there that was covered heavily on satellite radio, I heard him saying essentially the same stuff. In fact, I blogged about it at the time. I agree that it’s a ludicrous concept — but it isn’t like there’s anything new about it.

    As for the larger — oh, mush larger! — bailout, I agree with your first commenter: there’s a terrible shortage of bailout opponents from which to select a presidential candidate for whom to vote. At least, among the major-brand ones, anyway. Nader, Barr, and Baldwin have all spoken out against it … but that’s not likely to change anything. Which makes voting for them rather similar to voting for McBama: not going to change anything.

  3. Jim Wetzel says:

    Sorry — I meant “much” larger. I do wish the WordPress comment utility had a “preview” function, at least — an “edit” would be better yet.

  4. rjjrdq says:

    You get what you pay for.

  5. MCcain is grasping at straws out of desperation.
    Obama is ahead because the American people want change.
    They will get that on November 4th.
    Obama/Biden 08.

  6. clint jenkins says:

    This race is over obama has it in the bag.

  7. clint jenkins says:

    Clinton: Resurrect the HOLC, and Buy Up Bad Mortgages
    By: PAUL JACKSON
    September 25, 2008
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    Former Democratic presidential candidate and New York senator Hillary Rodham Clinton pushed Thursday for a wide-spread government purchase and modification of troubled mortgages in the name of protecting borrowers and restoring credit markets, according to an op-ed published in the Wall Street Journal.

    Clinton, who along with most Deomcrats has long advocated so-called “affordability modifications,” said that the nation’s current financial crisis will not be solved until homeowners are kept in their homes. Read the full op-ed.

    “The solutions we pursue cannot simply stabilize the markets,” she wrote. “We must also deal with the interconnected economic challenges that set the stage for this crisis — and reverse the failed policies that allowed a potential crisis to become a real one.”

    The senator suggested that the government revive the Depression-era Home Owners’ Loan Corporation, a New Deal government agency which purchased mortgages from failed banks and modified terms to allow borrowers to keep their homes.

    “The original HOLC returned a profit to the Treasury and saved one million homes,” Clinton said. “We can save roughly three times that many today.”

    For those looking for a history lesson, the Home Owners’ Loan Act of 1933 created the HOLC. The government agency issued bonds to lenders in exchange for acquiring defaulted residential mortgages; the HOLC would then refinance the mortgages into a “sustainable” mortgage. At the time, mortgages were amortized over much shorter horizons, so in most cases the HOLC merely extended loans to fully amortized, longer-term loans — 20 to 25 years, similar to the 30-year mortgage commonly known in modern mortgage markets.

    The idea was that lenders would at least have a marketable bond earning them interest, even if that interest was less than the mortgage; the option was clearly better than a non-performing asset. But some scholars have argued that what made the program work was a simple modification path for most troubled borrowers (i.e., simply lengthen the term) that didn’t put home prices at further risk of decline, and that no such simple path exists for many of today’s troubled borrowers.

    Clinton’s op-ed didn’t delve into that sort of debate, of course; it spoke in general terms, as most politicians do. “If we do not take action to address the crisis facing borrowers, we’ll never solve the crisis facing lenders,” she said. “These problems go hand in hand.”

    Congress is expected to pass some form of bailout package, including as-of-yet unknown provisions surrounding mortgage relief, sometime this weekend. But it’s clear that politicians are reaching back to the last great financial crisis our country has seen in a search for solutions.

    Thats YOUR girl. McCain stoled her idea.

  8. Clint:

    Wasn’t that idea put forth before the bailout passed? The point is we just got lambasted with a $700 billion tab to bailout the corporations.

    Enough is enough. Talking about the idea before the bailout is one thing – to add it on top of the $700 billion charity package we taxpayers are already providing is adding salt to the wound.

    If the idea to buy out mortgages was to be in place of the bailout, I could accept that even if I didn’t agree with it, but not on top of the bailout, and that is what McCain wants to do.

    My understanding it that there are already some provisions in the bailout for buying mortgages. Why on earth would McCain even throw the idea out when provisions already existed? I can only think of one reason – to try to pander to the voters who are not familiar with the bailout package.

  9. clint jenkins says:

    So you clearly dont believe now that housing is a right?
    You are right, acorn and subprime is a joke.
    I cant defend McCain on this because he is not a conservative and any bailout or subprime loan is not a conservative principle

  10. Stormy says:

    Its funny to me….

    Fiscal conservatives and the Republicans preach about less spending and less government. Yet Republicans today have spent trillions on this war, billions on this 700 billiopn dollar bailout (ie Bush and McCain encouraged) and passed more bills that control science, sexuality and censorship across the board than any democratic administration, period. Thats more spending and government control, not less. Whats up with that? Its hypicrosoy at its best!

    The one fact that I can agree with McCain is the one thing conservatives hate about his mortgage remarks…..we need to have the government buy up morgates then reduce their value simply because lowering premiums and interest rates are a gimmic to keep investors and realestate people in gravy with the realestate they still have in their hands. In this reduced economy, we HAVE to reduce everyones realestate value, and doing this will do that, and I agree with McCain on that. It doesnt matter whether tax payers buy them before or after this devaluation….it will play out reduced anyway over time, and everyone loses anyway. Once we have people holding mortgages at their true value (ie reduced), the real supply and demand market of realestate can return to a more normal state. Right now, thanks to realestate investors who flip houses and package these deals, its an artifically inflated micrososystem that cannot be sustained. The only way to get that whole thing back to normal is to have the government step in and buy them then reduce the values. Thats not rewarding anyone…..because anyone invested in realestate will lose money once trhe whole realestate market is reduced in overall value.

    Investors (not Republicans) hate this because they want to hold onto easy money….but its not sustainable. Its not tax payer money thats at stake here….its spanking the realestate investor market that needs to unfold. That will force anyone in realestate who makes money off of buying and selling of property or securities backed mortgages to go get a real job and do something with their careers rather than manipulating the system for quick money via overinflated realestate.

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