McCain wants to spend $300 billion more to buy up bad mortgages

michellemalkin.com ^ | 10/7/08 | Michelle Malkin

[longtermmemmory]

by the reset of the principle is a bankruptcy principle.

The concept is that a lender is estopped from lending ridiculous amounts to an attached collateral because they assume the risk of the debtor being held to the value of the collateral.

IOW lender assumes risk of devaluation of collateral. (or risk of overvaluing the collateral)

The question is whether mccain is looking to put this in the bankruptcy code the way it was for decades.

part of the reason for the credit logjam is the “bundles of overvalued collateral mortgages” are no longer desireable and nobody is buying them.

[TADSLOS]

Many of us are being asked to pay for others' stupid mistakes or greed (both from lender AND borrower perspective).
How "Reaganite" is this? how "Republican" is this?

The two terms are not interchangeable like they used to be.

"Republican" used to mean Conservative.

Yeah, now it's just the weak right arm of the DNC.

I also note that this site is an "independent Conservative forum", not an RNC run or GOP-sanctioned forum. Just some key points to keep in mind here.

Not anymore. It's been hijacked by McCain campaign hacks screaming in full Obama fearmonger mode.

God Bless Sarah Palin anyways......

Ditto. She's being hoodwinked and played by a liberal republican socialist.

[mysterio]

youngsters here have no inkling what this place used to be like it was ...well...conservative...surprise folks took pride in being a bit paleo or slightly libertarian

I remember.

[apocalypto]

I agree. I have been attacked as an Obama supporter and told to go on left Web sites "where I belong" because I have objected to John McCain's liberal policies such as amnesty, campaign finance reform, and his adultery. Go figure. I have also been told on FR (happened in early June iirc) that I am too conservative and that McCain does not want or need my vote.

How can anyone call John Sidney a conservative? His "reaching out across the aisle" is nothing more than him being on the same page with liberal Democrats.

[TADSLOS]

McCain wants to cover up the 5 million illegal alien loans out there.

Yes, and have American taxpayers pay their mortgage while he's at it!

[af_vet_rr]

I agree. I have been attacked as an Obama supporter and told to go on left Web sites "where I belong" because I have objected to John McCain's liberal policies such as amnesty, campaign finance reform, and his adultery. Go figure. I have also been told on FR (happened in early June iirc) that I am too conservative and that McCain does not want or need my vote.

I've had similar things happen - people using the "well if you don't support McCain, you support Obama and you're just as bad as a demoncrat" argument.

They won't give me a reason to support McCain, other than "he' not Obama", which isn't much of a reason. I'll vote for McCain (as much as it bugs me), but neither my wife nor I have donated time or money to the GOP this time around, and we've let the people hired by the GOP to make the donation calls know that we aren't going to do anything for the GOP. They'll get my vote, and that's more than they deserve.

Unfortunately, if McCain somehow wins (not looking like it at this point), then that will simply validate the GOP's move to the left, and so the next time around they'll move even farther to the left.

[jddqr]

Brewster was right.

[SecAmndmt]

“Carla Fiorina is on Fox right now supporting this Socialism and is proud of the idea that Gov’t should be doing this.”

These corporatist Republicans - anti-Constitution, open borders, anti-gun and pro-abortion all - are a bunch of national socialists.

Everyone in the office today (R’s all) is ridiculing McAmnesty.

[af_vet_rr]

Carla Fiorina is on Fox right now supporting this Socialism and is proud of the idea that Gov’t should be doing this.

How did she become a McCain advisor? The woman ran HP into the ground. I'm surprised they've managed to recover.

[flattorney]

In his first post-debate appearance, John McCain promoted his new plan to have the federal government directly buy mortgages and refinance them at lower interest rates to help beleaguered homeowners. His plan comes with a $300 billion price tag which is on top of:

The passage of a $700 billion bailout plan to buy up distressed securities;
A doubling and redoubling of emergency loan facilities at the Fed to $900 billion on Monday; and
The Fed’s unprecedented decision on Tuesday to start buying up short-term commercial debt for businesses of all types.

Further today, the Federal Reserve reduced its benchmark rate to 1.5 percent in a coordinated move to further shaft retired individuals, living off fixed income portfolios, and assure an Obuma presidential win.

When asked for comment, George Soros said he was proud of his adopted son, John McSoros. When asked if it was true that he and his cartel had engineered the stock market collapse, Mr. Soros said he needed to take another phone call and then was heard laughing when he hung-up the phone.

# # # # # #

George Soros and his Klan are laughing all the way to their respective foreign depository bank over the financial meltdown they engineered. - FlA

[adorno]

The proposal involves directing the Treasury Secretary to “purchase mortgages directly from homeowners and mortgage servicers.”

I actually agree with Michele.

I also agree with McCain.

Michele is more correct.

But, McCain is proposing something that can help. And we should consider it.

Many people were caught in the mortgage mess. Some were greedy, hoping to score big on the re-sale of their homes, some were just hopeful of getting an asset with tremendously increasing value. Some were just caught with high-mortgage rates after they had bought their homes with lower rates. Whatever the cause, many people found themselves not able to pay for their homes. Some defaulted and lost to foreclosure or are about to. There were also a lot of homes that were extremely overpriced.

In that whole mess, there are still people willing to stay and live in their homes and who don't want to lose their "investments" to foreclosure. It is those people willing to pay on their homes that should be "rescued". Those people should be allowed to re-work their mortgages to longer mortgages, or to lower mortgage rates, or to the current lower market values of their homes. If a bank gets back a home through foreclosure, they certainly won't be able to sell them at the old higher and overpriced value. And the bank for sure won't be able to sell that home at the higher rate that the original home owner had. So, why not let those homes stay with the current owner and the losses won't be as drastic?

[ravinson]

I think when you stabilize some homes values you stabilize the price of every house on that street.Since Mccain’s plan seems to be aimed only at valid mortgages ie not ninja loans then it can make sense. Some borrowers were conned into arm mortgages and now they can’t make the payments but if they abandon their house every house on that street takes a beating in value.

So you'd rather let your deadbeat neighbors stay in their houses (at your expense if you pay taxes), even though they can't afford to pay for them or maintain them? I think you're taking a very near-sighted look at the situation.

The only proper way to correct the federal government's mistake of guaranteeing/subsidizing home loans to bad credit risks is to let the current mortage holders (i.e. lenders) salvage whatever they can from their property by (1) foreclosure and resale or rent or (2) negotiation with the current residents. If the government steps into the shoes of the mortage holders (no doubt after overpaying for the mortgages), the government will bungle the salvage process and probably end up letting deadbeats live rent free or heavily subsidized by taxpayers, and wealth will be syphoned off further by deadbeats, bureaucrats, and political insiders.

Rather than subsidizing deadbeats, the government should be taking steps to accelerate and simplify the foreclosure/eviction process, because in the meantime the deadbeats are beating up the properties they occupy and thereby draining wealth from the economy.

[clintonh8r]

Zer0bama is right about one thing....McCain just doesn’t get it. How can this guy be so tone deaf? And why hasn’t immigration been mentioned during this campaign?

[ravinson]

So, why not let those homes stay with the current owner and the losses won't be as drastic?

That should be up to the prudence of the lender. If the government buys the loans, prudence will have nothing to do with their decisions on whether to foreclose/evict or negotiate.

[clintonh8r]

Idea for yard sign/bumper sticker:

NOBODY/08

[ravinson]

Many people were caught in the mortgage mess.

No one was "caught" in anything. They were willing participants in risky behavior. They could have rented or otherwised lived within their means, but they didn't and I don't feel like bailing them out. If you do, you're free to go up and down your street passing out more money to subsidize their risky behavior.

[adorno]

They were willing participants in risky behavior.

I hear you, and I agree with you.

I did mention that and I also mentioned that many let their greed get the best of them.

But, we can't undo what happened. Risky or stupid. It doesn't matter now.

What matters is how we get from the current mess into better times and into the best of times. One step at a time.

What McCain proposed is, quite frankly, socialism and itself, risky. But, we need to get over the past and into programs that can start getting us over the problems. We need to try to stabilize the real estate market and the credit markets. I'm not sure that socialism, in the form of rescue packages, will work, but, at least we can try to stabilize the situation. With people in a more stable home situation, and with the credit markets with the funding to lend, we can at least start making some headway towards, hopefully, capitalism again. What will be needed in the future is less government intervention and absolutely no government mandates on wall street and on the banks for very loose lending rules, which is what got us into these problems.

[dragnet2]

It still doesn't address the fact that a lot of people bought homes they couldn't really afford and are being enabled by the government to keep them.

If I wanted a loan to purchase Dodger Stadium with a 30k income would they loan it to me?

Fact is a lot of people were *approved* for loans they could not afford. The majority of those people had NO say if their loans were approved. The lenders lots all sight of common sense lending standards and ethics.

[dragnet2]

No one was "caught" in anything. They were willing participants in risky behavior.

You can't participate if your not qualified to.

If I wanted a loan to purchase Dodger Stadium with a 30k income would they loan it to me?

Fact is a lot of people were *approved* for loans they could not afford. The majority of those people had NO say if their loans were approved. The lenders lost all sight of common sense lending standards and ethics.

Another fact is, if your going to willy nilly throw around easy money, ya better expect real long lines.

It's totally 100 percent up to the lending institutions to determine if those applying for loans are qualified.

[ravinson]

You can't participate if your not qualified to.

But you can when the government is backing you. That's what caused the problems.

Fact is a lot of people were *approved* for loans they could not afford. The majority of those people had NO say if their loans were approved.

They had a huge say in their approval, both by applying for the loans and by voting for the politicians who promised and gave them subsidized housing. I agree with you that the lenders are morally culpable, but they were just doing what the government encouraged (or even compelled) them to do.

Another fact is, if your going to willy nilly throw around easy money, ya better expect real long lines.

I agree. Look at how the govenment bailout proposals keep piling up.

It's totally 100 percent up to the lending institutions to determine if those applying for loans are qualified.

That should be the case, but it has not been the practice, and McCain's proposal (which is really Hillary's proposal) would put the goverment in charge of re-negotiating the loans.