The McCain Mutiny

Posted by: Chris Palmeri on April 10, 2008

mcain.jpg

Damned if you do, damned if you don’t. That’s how presidential candidate John McCain must feel after announcing his own plan to fix the housing mess today. McCain proposed allowing homeowners with high-interest, adjustable rate loans taken out after 2005 to trade for a safer, 30-year loan, with government backing. The cost of the plan was estimated at up $10 billion.

Candidates Hilary Clinton and Barack Obama have already supported federally-funded bailout funds. Clinton called McCain’s proposal a “warmed over, half-hearted version of the very plan he criticized, to help families restructure mortgages to save homes and keep housing prices from falling further.”

Maude Hurd, president of the housing advocacy group Acorn said: “With a national mortgage delinquency rate approaching six percent, now is not the time for dipping toes in the kiddie pool,” said Hurd. “We need solutions of a great enough scope to meet the enormous challenges we face, like Chairman Barney Frank’s proposal to refinance up to $300 billion worth of risky mortgages into affordable, fixed-rate mortgages. Bush and McCain’s baby steps aren’t going to get it done. The banks must sacrifice, not just homeowners.”

Hurd went on to note that Airzona has been among the worst states hit by the crisis. In February, the state saw a 210% increase in foreclosure filings, to 9,650 properties. It was the fourth-hardest hit state in the nation, according to realtytrac.com.

Well, at least everyone’s agreeing on something, sort of.

Reader Comments

Trent Hamm

April 11, 2008 6:16 AM

I got a 30 year fixed rate mortgage in 2007. I could have gotten an ARM with a lot higher principal at the same time, but I chose to do what was fiscally reasonable for my family. Now McCain, Clinton, Obama, et. al. are rewarding the stupid people and I'm really REALLY not impressed.

If such plans actually happen, that means I would have had a $400,000 house instead of a $200,000 house for about the same payments, because the ARM would have permanently locked in because of the bailout.

That is personally insulting to me. I made the rational decision and the gov't is rewarding those who made the irrational one.

Voter4sale

April 14, 2008 4:12 AM

The greedy thieving hoards of real estate broker,agent, and flippers scammed the banks until several collapsed and several more on the verge of collapse. The last dot-com scam was barely 10 years ago. These serial speculation "bubbles burst" are indicative of a people who no longer have confidence in their future or their country's economy. When economic bubbles occur in quick succession, it is a sign of despair because it shows people are willing to gamble away their future instead of the steady honest work ethic. In the final days of Saigon(Ho Chi Minh City), the weekly lottery turned into hourly lotteries. Get rich scam proliferated and the desperate masses clamored for a chance to escape the inevitable end. Judging by the proliferation of casinos, state lotteries, and speculation bubbles, we can say Americans have lost faith in the American dream, and the American promise of a better future. It's every man for himself for a scrap-shoot for quick buck or two hoping to score big before end. These desperato have modern names: day-traders, flippers, boiler-room telemarketers, and real estate mortgage brokers. And now the politicians are kissing up or buying the flippers who couldn't unload their real estate as a mean of getting votes. The experts say to buy their votes will cost the taxpayer 10 billions-Rome fell for a lot less money.

JohnU

April 22, 2008 10:33 PM

Seriously...this is all so transparent now, and its not what you might think.

The FED and the govt. in general are only trying like hell to keep people in their homes, so their banker buddies don't have to take on more houses--They are already DROWNING in inventory!! If the banks take on more houses and have to make more write downs, they become insolvent. (Many feel they are already insolvent, just hiding it).

People are getting wise and are not willing to keep pouring money into a rapidly depreciating asset, no matter how their payment is tinkered with. The only solution is for housing prices to crash back down to the historical mean. No amt. of meddling can stop this tsunami from hitting our shores!!!!

Post a comment

 

About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

BW Mall - Sponsored Links

Buy a link now!