Not only does McCain want to give huge tax breaks to the richest people and companies and tax your health insurance, now he wants the American people to pick up the tab on his new mortgage plan. As details emerge, we see just how bad his plan is for the American tax payer. McCain has the nerve to say Obama is going to raise taxes when it’s his own policies that are doing all the taxing. Obama wants to cut taxes for 95% of the people in this country, for the middle class, the people who need it most. From CNN:
McCain’s original plan called for lenders to write down the value of these mortgages and take those losses. But the Republican presidential candidate unveiled a new $300 billion plan in response to the first question of the debate.
He said, “I would order the Secretary of Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes, at the diminished values of those homes, and let people make those – be able to make those payments and stay in their homes.”
The government would convert failing mortgages into low-interest, FHA-insured loans.
“Millions of borrowers” would be eligible for the program, dubbed the American Homeownership Resurgence Plan, according to McCain economic advisor Doug Holtz-Eakin.
To qualify, homeowners would have to be delinquent in their payments already, or be likely to fall behind in the near future. They would have to live in the home in question – no investment properties would be eligible – and have had demonstrated their credit-worthiness when they purchased the property by making a substantial down payment and by providing documentation of their income and assets – no liar loans.
Holtz-Eakin said on a conference call Wednesday that the McCain plan could be put into place quickly because the groundwork and the authority for it has already been provided by last week’s $700 billion bailout bill, the Hope for Homeowners program authorized by the housing rescue bill passed in July and the government takeover of mortgage giants Fannie Mae and Freddie Mac.
A change of heart
This proposal is strikingly different from both McCain’s original idea, and from the housing rescue bill adopted by Congress in July.
Congress struggled for months to pass the Hope for Homeowners rescue plan for mortgage borrowers – a bill that neither McCain nor Democratic candidate Senator Barack Obama voted on. To make it palatable to both conservative Republicans and ordinary taxpayers, Hope for Homeowners requires that lenders write down mortgage balances to 90% of a home’s current market value to qualify for a FHA-insured refinancing. The lenders would then take the loss on the difference between the current value and the mortgage balance.
“[McCain's] original plan relied on lenders taking the hit,” said Holtz-Eakin. “This bypasses that step.”
Instead, taxpayers pay for it, with the funding already provided by the $700 billion bailout bill.
Some Washington analysts were perplexed by the McCain proposal.
“The proposal is hard to understand,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. For one thing, Baker pointed out, it provides even less help for targeted borrowers than the Hope for Homeowners program does. In that plan, lenders must lower mortgage balances down to 90% of the home’s current value, while McCain’s plan will reduce loans to 100% of a home’s current value.
And, of course, under McCain, the cost of the write-down is picked up by taxpayers rather than by the lenders. That is a radical departure from McCain’s earlier responses to the housing crisis.
Is this really change we can believe in? How many times is he going to change his policies to suit whoever he is talking to at the time. He is a joke.