Presidential Debate: John McCain Wants to Buy Up Home Mortgage Loans
Last night I watched the second presidential debate between John McCain and Barack Obama. I thought many of the questions asked were relevant. And while I favor Barack Obama on issues from energy to health care, I would have liked to have heard him say a little more about the housing crisis than merely to promise to put the middle class first. The housing crisis was one of the issues on which John McCain offered more specifics than Barack Obama.
John McCain and buying up home mortgage loans
In between attacking Barack Obama and blaming Fannie and Freddie and the Democrats for this mess (I disagree on this; I think Fannie and Freddie and the Dems contributed, but that a bigger issue resides with credit derivatives and the GOP’s rabid insistence on deregulation to allow them) and touting his own “judgment” on a variety of issues, John McCain came out and said that the federal government should buy home mortgage loans and arrange for them to be refinanced at the current market rate. The government would earn interest on the loans, and perhaps get a stake increased value when the home sells.
This is pretty much the only part of McCain’s economic plan that would directly help the middle class. And I like it. Buying up home mortgage loans and refinancing them (and hopefully getting some share of equity when the home is resold) at reasonable fixed rates and at current market value would be a great way to accomplish two things:
- Help homeowners avoid foreclosure.
- Get the debt off the books of financial institutions.
I like this idea because it is a departure from McCain’s recent (since 2006) “trickle down” thinking. This is an idea that goes directly to the middle class and benefits those in the middle class directly.
However, I would like to see a program like this go one step further and be expanded to include homeowners who have been keeping up with their payments. Many people who have been doing right by their mortgage lenders are seeing themselves dip into negative equity because of housing value declines. I think that these folks should have access to the program — and at better rates.
Since the program would be voluntary, it would be up to homeowners as to whether or not they want to share some of their equity with the government when the home sells.
Tags: mortgage loans, equity, home mortgage loans, refinance,
mortgage interest, John McCain, Barack Obama
