Watching the debate or listening to the the drones form MSNBC, Fox and other stations regurgitate the debate endlessly late into the night, and I'm still scratching my head in regards to John's new mortgage plan. He wants to address the real issue...GREAT...but his plan will work for very few borrowers.
If I understand his plan correctly, his plan is not much different then the earlier legislation that Bush and Congress implemented earlier this year. In other words, allow FHA access to $300 billion, to insure those who are already delinquent into new home loans. Sounds great on paper, but who is this really helping.
John McCain, please read the newspaper once in a while. Home values have plummetted in many of these hard hit foreclosure markets. How is FHA going to insure a new loan on a mortgage that is greater then the value of the home. So in other words, FHA will not be able to write a new loan and the borrower still falls into foreclosure.
I wrote about a possible solution last week. There are some holes still with my concept, but at-least it addresses the fundamental issue. FALLING MARKET VALUES!! The other problem, if you do not reduce the mortgage balances at this point, the borrowers will still be unable to pay their payments.
McCain needs to seriously think through possible economic solutions before throwing them out as red meat in a debate.
previous article....one possible solution to the mortgage mess
***UPDATE Now I'm learning that his actual suggetion is that the goverment buy's down the mortgages to market value....but where is the tax payer protected in this situation? This is perhaps more socialist then anything that has been suggested to date! We need some clarity in his position at this point.
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