Obama’s been taking a lot of hits lately from the left, but here’s something we didn’t expect to see: liberals supporting policies that McCain took during the campaign.
And yet, that’s exactly what we get from David Woolner at NewDeal2.0 (the blog of the left-of-centre Roosevent Institute). He argues that what we need is a revival of the Homeowners Loan Corporation, a New Deal era institution that was essentially tasked with massive housing refis — getting the banks out of the process.
Equally important, the HOLC’s strategy of buying out existing mortgages and replacing them with new ones based, not on the typical short-term mortgage agreement of the time (usually a non-amortized loan of seven to 10 years terminating with a balloon payment), but rather on the far more affordable amortized mortgage of between 20-five and 30 years, would eventually become standard practice and help revolutionise the mortgage industry. The HOLC obtained its financing by borrowing from the Treasury and from capital markets, and by the time it had closed its books in the early 1950s, it had turned a small profit.
So will Obama attempt something like that? Who knows. The administration has downplayed the possibility of some big October Surprise to bail out homeowners.
But you know who supported the HOLC? John McCain. He specifically proposed this idea in a debate in October 2008. He didn’t go into too much detail of how his HOLC would work, and we don’t recall it coming up again during the campaign. But with Obama’s HAMP working like garbage, it’s worth wondering whether McCain’s fondness for an old new deal program might be what we’d have now if the election went differently.
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