Apparently, John McCain did even worse than I thought in last night’s debate. He and Barack Obama both failed to present a step-by-step plan as to what they were going to do about America’s banking crisis. They both merely rehashed old plans they have been discussing for months. But, McCain failed more in that he presented something old as something new. And it wasn’t even his.
Remember that new mortgage plan he touted last night and that his campaign released to much fanfare? It’s already in the bailout package.
Housing Wire says:
In a heated debate Tuesday, Senator John McCain repeatedly touted his plan to bail out the ailing housing industry.
“As President of the United States, I would order the secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes, at the diminished value of those homes,” he said.
McCain’s proposed plan, dubbed the “Homeownership Resurgence Plan” by his campaign, consists of the government renegotiating $300 billion in bad mortgages so borrowers can afford to stay in their homes.
“We’ve got to give some trust and confidence back to America,” McCain said Tuesday. “I know how to do that, my friends, and it’s my proposal. It’s not Senator Obama’s proposal. It’s not President Bush’s proposal.”
Critics argue, however, that the plan is strikingly reminiscent of Treasury Department secretary Henry Paulson’s bailout plan, which was passed by the Senate and signed into law Friday. Specifically, the plan echoes Section 110 of the law.
Hmmm. What’s more is McCain’s plan is completely unrealistic. Part of the problem is that securitization has taken your mortgage and mine and our neighbors’ and chopped them up into pieces and sold them off to a hundred different people in Mortgage-backed securities. Doing what McCain wants to do and modifying individual mortgages is very difficult in this new securitized world when 100 different people are involved.
Housing Wire again:
McCain’s plan fails to address the complications of securitization, through which investors buy bundles of loans. The current system is not structured for servicers to distinguish and modify individual mortgages from other securitized loans, an issue overlooked by McCain’s move for the government to buy mortgages “directly from servicers.”
Any way you look at it, McCain’s mortgage plan is dead on arrival.
McCain’s Bailout: Déjà Vu All Over Again? – Housing Wire