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McCain's Homeowner Resurgence Plan
I just read the details of McCain's plan to refinance mortgages and bring them into line with the current value of homes.
I actually like it.
The plan goes back to the New Deal. I wish there was some way for liberals to support it, even if McCain grabs the credit.
The link feature on blogs seems to be broken, so here's a link to plan.
http://www.johnmccain.com/Informing/Issues/Read.aspx?guid=b9af0d4c-9c0e-4a97-b27f-19df8cfec83d
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Comments (43)
Billy -
Feel free to correct me, but it is my understanding that this already exist in the present plan should the Secretary of the Treasury want to do it.
October 8, 2008 3:21 PM | Reply | Permalink
You're correct: it's already part of the existing bailout plan. If McCain is proposing something new, he should explain how he's going to pay for it.
Remember the Liar Guy on SNL? John McCain is the new Liar Guy. "That was MY idea. Yeah, that's the ticket!"
October 8, 2008 3:28 PM | Reply | Permalink
"Tommy Flanagan" (as played by Jon Lovitz) was the character you reference.
I remember that because my wife, Morgan Fairchild, reminded me. Yeah, that's the ticket...
October 8, 2008 3:41 PM | Reply | Permalink
http://www.johnmccain.com/Informing/Issues/Read.aspx?guid=b9af0d4c-9c0e-4a97-b27f-19df8cfec83d
That's the link, JS. Sorry I couldn't link in the post.
October 8, 2008 4:18 PM | Reply | Permalink
Here's the passage that relates the proposal to existing legislation.
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.
October 8, 2008 4:20 PM | Reply | Permalink
It is the Chris Dodd plan, so of course now Billy Glad will morph into Silly Sad, denounce the Democratic plan, and then retreat to all he has left:
A noun, a verb, and The Hive. He will then complain about the echo chamber effect that is being caused by the bees in his bonnet.
October 8, 2008 3:58 PM | Reply | Permalink
I think if you read the plan you see that the Treasury has the authority it needs, JS. They say the debt limit may have to be raised.
My point is I don't care who gets credit for the plan. Call it the Dodd/Obama/McCain/X plan for all I care. It would help some people who are hurting stay in their homes.
October 8, 2008 4:13 PM | Reply | Permalink
Playing devils advocate for a minute. I'm not so sure I agree with McCain and not because it's his idea. First according to a University of Ohio study ( http://www.osu.edu/news/newsitem2151 ) majority of the bad mortgages are for commercial and speculative property. Do we bail out the commercial building owners, flippers and developers?
Next do we bail out the folks who knew they shouldn't have taken out the mortgage they did? So I'm left with the folks who through no fault of their own, mislead by lender, medical bankruptcy, lost jobs etc who should get help. So do we really need to raise the limit all that much?
Based on the study single family defaults are in the $180B range (FYI I think this is a underestimation) so lets say there is $180B worth of mortgages out their that need honest help. Could we no do this under the existing plan?
October 8, 2008 4:30 PM | Reply | Permalink
This action is clearly contemplated in the bill already passed. For McCain to take credit for it now, when he was totally silent last week seems to indicate this is yet another stunt in his ongoing desire, not to solve any problems, but to get attention. I don't see why someone gets credit for that.
So he is proposing to buy the mortgage from the bank at full price and re-write at the market price. The difference goes directly from the taxpayer to the bank that holds the mortgage. Giveaway from taxpayer to bank owner. That could get very very expensive.
The alternative is to take the same amount of money and buy the banks shares, and let the bank write down the mortgage to a manageable principle and rate. That way the bank get capital and the taxpayers gets a share of future profit.
What am I missing?
October 8, 2008 4:38 PM | Reply | Permalink
Not true. Apparently, he is going to require the banks to take the loss on the difference between the original loan value and the present value. I know it's not Hive food, but I've tasted it. You can safely read the details of the plan. Sorry if this double posts.
October 8, 2008 4:49 PM | Reply | Permalink
I think you will find that insults don't get you very far if you actually want to discuss the technical aspect of policy, so shove that hive up wherever it fits most comfortably for you.
As for your interpretation of the plan, I think you are mistaken.
Feel free to provide the language you think makes this clear. Everything else I have read says opposite. We are "relieving the negative equity".
October 8, 2008 5:13 PM | Reply | Permalink
"Mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages." Losses on whose books? Maybe he's thinking of using the existing legislation that discounts 15%. Try not to choke. I'll burp you if you want.
October 8, 2008 5:44 PM | Reply | Permalink
Gov't buying and refinancing some home loans for those who can afford to stay in them? I like the plan. I liked the plan better in April when Hillary proposed it along with freezing the ARM rates and a 3 month moratorium on foreclosures. Who knows whether this crisis would have been so bad if they had acted then. Both Obama and McCain had much more cautious plans at the time - and still do.
McCain has now locked up the conservative vote with Palin and is now going for the mavericky Hail Mary with a more liberal than Obama plan for home foreclosures. But could he get it passed? He couldn't even get the Republicans to vote for the bailout bill for Wall Street. I doubt he could rally them behind a bailout for homeowners, particularly given that Republicans have been blaming irresponsible homeowners for the crisis.
That proposal hit me as a poltical ploy from a candidate that is looking increasingly desperate for something to change the game.
October 8, 2008 4:21 PM | Reply | Permalink
At what price was Sen. Clinton proposing to buy the mortgages?
Govt can put a ceiling on the rates it charges, but capping the rates other could charge seems to be might have made things worse.
October 8, 2008 4:42 PM | Reply | Permalink
Who is going to vote against it, dijamo? The Democrats?
October 8, 2008 4:50 PM | Reply | Permalink
All he'd asking them to do is raise the debt ceiling so the Treasury could act.
October 8, 2008 4:51 PM | Reply | Permalink
It's not the kind of plan you spring in the middle of the debate. If McCain wanted to take a leadership position and make this a part of legislation, then the maverick should have done so as part of a comprehensive bailout bill. The Dems would definitely go along with it. Conservatives will have enough power to stop this and the homeownes won't have those huge lovbbying interests pushing for Congress to pass the bill yesterday or face more banks failing. Congress can block the last 350 billion, so it's not like the treasury Secretary can do this without buy in.
I just don't find his commitment to this genuine, especially when in the same debate he's still blaming irresponsible homeowners and now he flip flops to protect them? Does not pass the BS test to me.
October 8, 2008 5:20 PM | Reply | Permalink
The Republicans are going to vote against it, in DROVES.
October 9, 2008 9:22 AM | Reply | Permalink
What McCain says he will stand for and what he will stand against is pure fiction.
You heard him rail, last night, against earmarks, and yet:
McCain's running mate is the Queen of Earmarks.
She has requested more per person than any other state in the union.
She even gets earmarks to study the sex lives of fish. I think she wants to teach them sexual abstinence, so they can have shotgun marriages, the Palin family way.
http://seattletimes.nwsource.com/html/nationworld/2008154532_webpalin02m.html
Sarah Palin's two million earmark to study the mating habits of crabs, and I guess, to make sure that they do not get abortions.
http://enclave-nashville.blogspot.com/2008/09/sarah-palins-2-million-earmark-for.html
October 8, 2008 4:34 PM | Reply | Permalink
Aside from the "already proposed" matter, this component is, if you pardon me, troubling:
The linking seems to work alright*. You must first highlight a section of text, and then clicking the Link button provides a dialog to enter the URI.
* That is, as idiotically as usual.
October 8, 2008 4:37 PM | Reply | Permalink
Drop the Hive talk, folks.
http://voices.washingtonpost.com/the-trail/2008/10/08/mccain_adviser_offers_details.html
Nobody in the McCain camp is denying the idea has been out there. They have decided to push it. Who gives a rat's ass who has a good idea first? If it's a good idea, I'm for it.
You have to live in the home, JS.
October 8, 2008 4:45 PM | Reply | Permalink
Billy Glad does not read his own blog headline.
"McCain's Homeowner Resurgence Plan"
Billy gave McCain all the credit for the plan, and when he was shown to be wrong, then he morphed into Silly Sad, with his usual: a noun, a verb, and The Hive.
October 8, 2008 5:19 PM | Reply | Permalink
They have decided to push it as if it were their own, and no one else's, when it was written into the original plan that's already passed. What putzes.
And Billy:
"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."
Looks like they are buying your mortgage and replacing it with a fairer one, but expecting lenders to take losses. "
"For those that cannot make inflated payments or their mortgage exceeds the value of their home, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages."
Show me where it says that they are buying in such a way that the lender takes the losses. It says the "losses are put on the books"; WHOSE BOOKS? It doesn't say whose books, can't you read?
And just because you didn't put a down payment on the house, that doesn't uniquely differentiate whether you bought the place in good faith and want to stay in it, or not. This is more poorly thought out McCain bullshit, where he's trying to take credit for someone else's idea in the first place. EPIC FAIL for McCain.
October 9, 2008 9:20 AM | Reply | Permalink
It turns out you're right. The campaign's original message that the banks would take the loss was overruled. It's the taxpayers who will take the loss in the current McCain campaign interpretation. I still think that is better than nothing. I also think it's open to revision again over the next month. However, it's pretty clear to me that the partisanship in DC is only increasing, so McCain's plans would certainly be sabotaged by the Congress.
October 9, 2008 9:57 AM | Reply | Permalink
Drop the lame, cliche's Billy. Every time you're cornered you run to one of your incredibly weak conspiracy defenses. It's the "Hive", it's the echo chamber. What. Ever. Stand up on your hind legs and defend your position and quit blaming people's disagreement on some vast conspiracy. You get a lot of push-back because you choose--I repeat, you choose--to post on a site where you know people will disagree. Call it what you like. The fact is, you're the guy with the stick in your hand.
October 9, 2008 3:48 PM | Reply | Permalink
OK found this description of the housing bill already passed this summer on DeLong's website:
"the housing bill passed by Congress over the summer, and which went into effect Oct. 1, required lenders to take a loss by writing down the principal on troubled mortgages to 85% of the house's current value. Borrowers with adequate incomes and credit records would then qualify for refinanced mortgages from new lenders.
Government funds were used only to help finance mortgage insurance for the new loans; cost estimate for taxpayers was roughly $20 billion."
October 8, 2008 4:46 PM | Reply | Permalink
Clearly McCain proposes to go far beyond that. Can you imagine how amusing I'm finding this dialogue? I told you the echo chamber had degenerated into a Hive. No one has escaped the madness.
October 8, 2008 4:57 PM | Reply | Permalink
http://ap.google.com/article/ALeqM5isOFwdbq0tsqatW6vJpkDRTI1gMgD93MH2F00
October 8, 2008 5:01 PM | Reply | Permalink
So it's better to bail out the derivatives and let the homeowners go under. Amazing. Quite a price for poor people to pay for Obama not having thought of the idea first.
October 8, 2008 5:10 PM | Reply | Permalink
http://www.portfolio.com/views/blogs/capital/2008/10/07/mccains-insane-mortgage-proposal?tid=true
October 8, 2008 7:15 PM | Reply | Permalink
How different is this compared to Hillary's piece in the WSJ 2 weeks ago:
"I've proposed a new Home Owners' Loan Corporation (HOLC), to launch a national effort to help homeowners refinance their mortgages. The original HOLC, launched in 1933, bought mortgages from failed banks and modified the terms so families could make affordable payments while keeping their homes. The original HOLC returned a profit to the Treasury and saved one million homes. We can save roughly three times that many today....
The time for ideological, partisan arguments against these actions is over...." I like that last line. ;-)
October 8, 2008 5:12 PM | Reply | Permalink
You run a great risk bringing Outsider food like that into the Hive, young man.
October 8, 2008 5:40 PM | Reply | Permalink
McCain's plan is not HOLC. There are misassumptions all over the place, including in this thread, about both and where Obama stands... for example:
Obama opposes the plan because it puts the burden on taxpayers instead of lenders. Billy says
but McCain's advisor Holtz-Eakin said this morning that
Should Obama fill the (appearance of a) void more forcefully with a better plan, like the several that Dems like Clinton and Dodd have been advocating for months? Sure. But latching onto a faulty plan seems like quite a price for poor people to pay just so you can play 'gotcha!'
October 8, 2008 6:13 PM | Reply | Permalink
It's not going to cost the poor people anything. Under the current "rescue" plan they get nothing. Sounds like Obama would rather lose a few poor people than lose the election.
October 8, 2008 8:30 PM | Reply | Permalink
Let's see what emerges from the give and take on this one. Maybe the taxpayers and the banks will share the risk. Maybe not. I'd rather see my tax money used to keep people in their homes than to bail out the financial sector who create these derivatives in the first place. I still respect Obama. But believe me, over the last couple of months, I've lost all respect for the Hive. And he's slipping fast. First you thought of it first, and when you couldn't sell that, you piss on it? Proud of yourself little man? I'm not.
October 8, 2008 8:42 PM | Reply | Permalink
I agree that we'll have to wait to see what comes out of it. Obama criticized McCain for coming out with his idea like it was something new as summarized in the debate. Since then the McCain camp has been 'clarifying' it and the smelly parts are getting aired, and that's when Obama changed from "that's what we've been saying all summer long" to "nope, that's stupid."
McCain's plan isn't something groundbreaking -- hell, he himself has mentioned similar ideas as far back as July. It basically amounts to a strategy of employing the authority/funding that was already granted in the bailout bill. The more his camp talks about the details, the further it goes from what Hillary and Dodd have been advocating, which makes it particularly noxious on Black's part to claim McCain got the idea from Hillary. Sure, she might've been the inspiration (though I doubt the sincerity of that, coming from McCain) but he's doing his best to shit up her proposal.
Obama's at fault for not seizing on, articulating in detail, and more forcefully advocating a HOLC/Dodd plan, even though he's made comments supportive of a HOLC-type setup as recently as the floor debates on Oct 1. It was McCain's coup to mention it in a debate when people were actually paying attention.
October 8, 2008 9:22 PM | Reply | Permalink
Here is a passage from a McCain letter announcing the plan.
"For those that cannot make inflated payments or their mortgage exceeds the value of their home, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages."
And this from the published plan.
"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."
Looks like they are buying your mortgage and replacing it with a fairer one, but expecting lenders to take losses.
October 8, 2008 5:16 PM | Reply | Permalink
Purchase those homes, at their current market value, then rent them to those who could not pay their mortgages. Why give them a new mortgage. Just let them pay rent, and when housing values recover, then the government will have very valuable assets on hand. In the mean time, most people will have roofs over their heads, and the government can use the rent they collect, to service the increase national debt that they incurred by purchasing the homes, at depressed market value.
October 8, 2008 5:25 PM | Reply | Permalink
The wisdom of the Hive never ceases to amaze me. ROFL.
October 8, 2008 5:37 PM | Reply | Permalink
Billy Glad; A noun, a verb, and The Hive. That is all he has got, except for when he occasionally trots out his shabby ploy of pretending to be seeking a Nader supporter, to trade votes with. It is one of Billy's fall back brain fart standards, and one that can get him in trouble with the feds.
October 8, 2008 5:51 PM | Reply | Permalink
Well is very interesting...
http://www.politico.com/news/stories/1008/14414.html
plan changed overnight: Billy looks like you are subsidizing the banks.
Also looks like TARP is going to morph into capitalizing banks directly, too.
wild and woolly out there....
October 9, 2008 12:19 AM | Reply | Permalink
Yep. You're right. Maybe, under pressure, it will morph again. By the way, until you self-identified with them, I never considered you a member of the Hive. Actually, only four of them turned up on this thread, which is some kind of record. Maybe they are finally losing interest.
October 9, 2008 10:02 AM | Reply | Permalink
Why waste a perfectly good stinger on a corpse?
October 9, 2008 7:24 PM | Reply | Permalink
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