My Beautiful Wickedness

Courtesy of on McCain’s mortgage proposal
October 8, 2008, 9:49 am
Filed under: Uncategorized

Since the only thing about last night’s debate was new was McCain’s discussion about mortgage relief, let’s examine what the non-partisan has to say on that score:
“My” Mortgage Plan?

McCain made what he claimed was a new proposal to rescue over-mortgaged homeowners:
McCain: 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 and let people be able to make those – be able to make those payments and stay in their homes.
McCain added: “It’s my proposal, it’s not Sen. Obama’s proposal, it’s not President Bush’s proposal. But I know how to get America working again…”

But in fact, the recently passed $700 billion rescue package

    already grants the treasury secretary authority to undertake just such a program. It requires the secretary to buy up troubled mortgages while taking into consideration “the need to help families keep their homes and to stabilize communities.” It also says “the Secretary shall consent, where appropriate (to) loss mitigation measures, including term extensions, rate reductions (or) principal write downs.”

Obama himself had urged this as the package was being considered. He said on Sept. 23 that “we should consider giving the government the authority to purchase mortgages directly instead of simply purchasing mortgage-backed securities.”

McCain said Obama’s proposal would be expensive, and his campaign quickly issued a news release giving numbers:
McCain press release: The direct cost of this plan would be roughly $300 billion because the purchase of mortgages would relieve homeowners of “negative equity” in some homes. … It may be necessary for Congress to raise the overall borrowing limit.
Minutes later, McCain was attacking Obama for proposing what he said was $860 billion in new spending.

So there you have it. But the story goes deeper than that, really. Hoover did something to bail out mortgages. There was also a New Deal program created in 1932 that did something similar that is still on the books — it’s called the Federal Housing Finance Board. You’d think a person who lived through the first Great Depression and has been serving as a Senator for 20-odd years would know that.

But naturally, Mr. Asleep at the Switch doesn’t know about those historical developments and their outcomes, nor does he know about the Treasury Department’s existing powers to act in the manner he suggests, nor apparently does he know that the President doesn’t have the kind of authority that he claims he’s going to level (remember when he said he was going to fire the SEC chair…which the President can’t do? That’s the problem with putting an egotistical autocratic Lone Ranger into a constitutionally limited role — I’d advise we don’t do that again.)

Why is he so out of it now? Maybe because he’s late to the party. Remember, he was busy until a few weeks ago trying to deny that there was a mortgage crisis and insisting that there was no need for federal intervention — unlike a skinny senator from Illinois, who was trying to propose a rescue plan for middle-class mortgage relief SIX MONTHS AGO.

Not impressed.


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