The housing crisis is hurting millions of American families, wrecking the financial system, and slamming the economy. So what do Obama and McCain have to say about it?
The candidates basically agree, especially about where the responsibility for the crisis lies: mortgage lenders are predatory scum, and the people who borrowed from them are responsible and virtuous.
McCain Housing Plan: Sock It To The Banks
John McCain’s proposed rescue package is called “HOME.” Under the plan, subprime borrowers who can verifiy eligibility will be allowed to “to trade a burdensome mortgage for a manageable loan that reflects their home’s market value.”
Essentially, the plan requires lenders to forgive part of the loan, and then write a new loan which is backed by the FHA. McCain also supports more “transparency and oversight” in mortgage lending, whatever that means.
Obama Housing Plan: Sock It To The Banks and Pat Borrowers On The Head
Barack Obama also wants to punish lenders rather than defaulting borrowers. To this end, he suggests a $10 billion foreclosure prevention fund that will:
- Dramatically increase emergency pre-foreclosure counseling resources.
- Help people who bought houses that are simply too expensive to sell them.
- Partner with state governments, community organisations, and loan providers to ensure fair loan modifications can be made in a timely manner that avoids the need for foreclosure or bankruptcy.
On top of the $10 billion fund, Obama proposes providing $10 billion more in federally backed mortgage revenue bonds that will allow delinquent borrowers to refinance their loans. Obama also supports a number of measures that increase transparency in lending and that go after “predatory lenders.”
Not to quibble, but hasn’t the market taken care of “predatory lenders” by now?
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