Chicago Tribune rips apart McCain’s mortgage plan

this sunday, the chicago tribune, one of america’s staunchest conservative papers, tore into mccain’s mortgage plan:

Exactly three sentences after vowing to halt the spending spree, he unveiled a plan for the federal government to buy every bad mortgage and refinance it at taxpayer expense. “Is it expensive?” he asked. “Yes. But we all know, my friends, until we stabilize home values in America, we’re never going to start turning around and creating jobs and fixing our economy.”

It also looks like a much worse bargain for the Treasury than the Paulson plan. The latter would buy mortgage-backed securities at a premium over today’s fire sale prices, and then sell them later once the market has stabilized and prices have risen. In theory, the government could make a profit.

Not so with the McCain program. It would take a loss upfront. Say you have a $250,000 mortgage on a house worth $200,000. The government would pay off the original loan and then offer you $200,000 in a low, fixed-rate, 30-year mortgage. That means eating $50,000 right away. If your house later rises in value, the taxpayers would not get a share of the windfall, another departure from Paulson’s approach.

mccain boasted that this was his own plan, not bush’s and not obama’s. well there might be a reason no one else  thought this would be a good idea…

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4 Comments

Filed under Economy

4 responses to “Chicago Tribune rips apart McCain’s mortgage plan

  1. Pingback: Chicago Tribune rips apart McCain’s mortgage plan

  2. Pingback: Chicago Tribune rips apart McCain’s mortgage plan | Mortgage Refinance Blog

  3. Pingback: Chicago Tribune rips apart McCain's mortgage plan | Mortgage Refinance Blog

  4. Pingback: Chicago Tribune rips apart McCain's mortgage plan | Mortgage Refinance Blog

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