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bluegreen08
LIF Adolescent
Member since 10/07 574 total posts
Name:
a
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Questions about McCain's Mortgage Rescue Plan - UPDATED
Can we discuss this? I want to make sure I understand what this would actually mean.
My impression was that the government would buy back the bad debt and allow people to refinance at the new (lower) value of their homes?
So... this would only apply to the people who are about to default? What about the people who bought homes they could afford and arent going to default? If this is true, wouldn't it encourage those people to stop paying for their mortgages as well?
Also, if the government is buying back the bad debt, doesnt that mean it's just like another bailout where the burden would fall on the taxpayers?
I don't remember if this was McCain's old plan or Obama's plan or nobody's plan, but I thought originally the securities companies were going to take any losses incurred by "refinancing" the loans... not the taxpayers?
I'm torn about how I feel about the whole thing anyway -- I'd hate to reward the people who bought homes they couldn't afford and penalize those who actually were responsible and bought things within their means. I'd also hate to shield the companies that took advantage of buyers.
Can someone clarify what the candidates plans are, what the McCain plan specifically would mean, and what you think is the solution?
I'm trying to get more informed here
Message edited 10/11/2008 6:30:46 PM.
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Posted 10/10/08 12:10 PM  |
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Mommy2Boys
My Boys!!!!
Member since 6/06 14437 total posts
Name:
C
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Re: McCain's Mortgage Rescue Plan
I had the same take on his plan after the debate. I am not supporter of this plan and he said it was the first thing he would do when he got into office.
I bought my house at the height of the market in 2006...that was our decision but we could afford it and make our payments. Basically he wants to buy the mortgages of those that are in default and re-price their house based on what the market value is now and re-do their mortgage  So, I am being penalized b/c I can make my payments???  If he is going to do that...than everyone's houses should be re-assessed and given new mortgages IMO, which is obvioulsy unrealistic.
Message edited 10/10/2008 12:17:19 PM.
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| Posted 10/10/08 12:16 PM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: McCain's Mortgage Rescue Plan
it's not as simple as that, but if that happens it will devalue the whole market.
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| Posted 10/10/08 12:23 PM |
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MarisaK
HELLO Manolo !!
Member since 5/06 14562 total posts
Name:
Marisa
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Re: McCain's Mortgage Rescue Plan
I think when he talks about it he does it in the MOST simplistic terms (ie: I'm going to buy up all of the bad debt and remortgage your house at the current value.......)
There MUST MUST MUST be a million more aspects to his 'plan'
And I agree, he's going to devalue the entire market.
I do not support this idea AT ALL -
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| Posted 10/10/08 12:28 PM |
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bluegreen08
LIF Adolescent
Member since 10/07 574 total posts
Name:
a
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Re: McCain's Mortgage Rescue Plan
I'm sure I have to be missing something because it sounds like a horrible idea to me.... and scary too.
Rewarding those who are living beyond their means, penalizing those who spent responsibly and then encouraging those who spent responsibly to default on their loans? And devaluing the housing market? and doing all of this at the expense of the taxpayers?
There has to be something I'm missing.... or he wouldn't be touting this like it would save our country.
Please some McCain supporters explain this to me? 
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| Posted 10/10/08 12:34 PM |
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metagefken
LIF Adolescent
Member since 5/08 679 total posts
Name:
J
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Re: McCain's Mortgage Rescue Plan
i dont know if anyone else caught this, he also said that he not only wants to readjust the financing on these mortgages but the principle as well. now, i'm nowhere near as knowledgeable in mortgages as some here, but what i understood is that he wants to bring the principle down to market value. so, if you bought your house for $400k and its not only worth $320k your principle would adjust to that amount. now, i may completely wrong (and i hope i am) but if this is what he wants to do, he seriously needs to rethink this.
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| Posted 10/10/08 12:35 PM |
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bluegreen08
LIF Adolescent
Member since 10/07 574 total posts
Name:
a
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Re: McCain's Mortgage Rescue Plan
Posted by metagefken
i dont know if anyone else caught this, he also said that he not only wants to readjust the financing on these mortgages but the principle as well. now, i'm nowhere near as knowledgeable in mortgages as some here, but what i understood is that he wants to bring the principle down to market value. so, if you bought your house for $400k and its not only worth $320k your principle would adjust to that amount. now, i may completely wrong (and i hope i am) but if this is what he wants to do, he seriously needs to rethink this.
So... what happens to that $80k?
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| Posted 10/10/08 12:36 PM |
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metagefken
LIF Adolescent
Member since 5/08 679 total posts
Name:
J
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Re: McCain's Mortgage Rescue Plan
Posted by bluegreen08
Posted by metagefken
i dont know if anyone else caught this, he also said that he not only wants to readjust the financing on these mortgages but the principle as well. now, i'm nowhere near as knowledgeable in mortgages as some here, but what i understood is that he wants to bring the principle down to market value. so, if you bought your house for $400k and its not only worth $320k your principle would adjust to that amount. now, i may completely wrong (and i hope i am) but if this is what he wants to do, he seriously needs to rethink this.
So... what happens to that $80k?
he never went into details. he just threw this out there. i almost fell off the sofa when i heard this.
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| Posted 10/10/08 12:39 PM |
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cjik
Welcome 2010!
Member since 2/06 8879 total posts
Name:
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Re: McCain's Mortgage Rescue Plan
Yeah, I'm not clear on the plan either. I keep thinking there must be something I'm missing or don't understand, because it doesn't sound as if it will work.
And I agree, we bought responsibly and didn't take the max mortgage banks would have given us which would have put us in over our heads very quickly. So I feel as if there is no incentive to keep making our payments, other than keeping our good credit rating (which isn't anything to sneeze at, esp. now).
Has anyone found a written copy of his plan? I didn't see it on his site, though maybe it is posted now.
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| Posted 10/10/08 12:55 PM |
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hotelcalie
LIF Adult
Member since 12/05 1392 total posts
Name:
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Re: McCain's Mortgage Rescue Plan
I don't feel people who were responsible in their purchases should have to bail out ppl who were not. I didn't buy above my means...why should I pay for people who did.
From McCain web site:
John McCain has proposed a new "HOME Plan" to provide robust, timely and targeted help to those hurt by the housing crisis. Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home's market value.
* Eligibility: Holders of a sub-prime mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30 year fixed-rate mortgage on the existing home.
o John McCain's HOME Plan Will Keep 200,000 To 400,000 Families From Losing Their Homes. "But at the same time, McCain is calling for aggressive federal action to help keep 200,000 to 400,000 families from losing their homes. That plan has many of the elements of a proposal by Rep. Barney Frank, D-Mass., and Sen. Chris Dodd, D-Conn., requiring participating lenders to forgive part of the loan principal and then write a new loan that would be backed by the federal government through the Federal Housing Administration." (Tom Raum, "Everyone's Invited: McCain Economic Plan Draws From Both Parties," Tucson Citizen, 4/17/08)
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| Posted 10/10/08 1:07 PM |
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Mommy2Boys
My Boys!!!!
Member since 6/06 14437 total posts
Name:
C
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Re: McCain's Mortgage Rescue Plan
Posted by metagefken
i dont know if anyone else caught this, he also said that he not only wants to readjust the financing on these mortgages but the principle as well. now, i'm nowhere near as knowledgeable in mortgages as some here, but what i understood is that he wants to bring the principle down to market value. so, if you bought your house for $400k and its not only worth $320k your principle would adjust to that amount. now, i may completely wrong (and i hope i am) but if this is what he wants to do, he seriously needs to rethink this.
That's the idea I got from what I have heard...which I think is terrible. Like I said in my OP, I bought my house in 2006, does that mean my home value and mortgage are going to be adjusted than too? 
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| Posted 10/10/08 1:11 PM |
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Blazesyth
*yawn*
Member since 5/05 8129 total posts
Name:
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Re: McCain's Mortgage Rescue Plan
Posted by hotelcalie
From McCain web site:
John McCain has proposed a new "HOME Plan" to provide robust, timely and targeted help to those hurt by the housing crisis. Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home's market value.
* Eligibility: Holders of a sub-prime mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30 year fixed-rate mortgage on the existing home.
Oy....I think I'll stop making payments so that they can reasses my home at the new, crappy value and I can get a new loan.
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| Posted 10/10/08 1:13 PM |
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bluegreen08
LIF Adolescent
Member since 10/07 574 total posts
Name:
a
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Re: McCain's Mortgage Rescue Plan
where is this money coming from?
i know they mention it takes aspects from the dem suggestion, but i think the major difference is that in the dem plan the mortgage companies were going to take the loss, while in mccain's plan the fed govt (taxpayers) will be taking the loss.
how will this not raise taxes?
it may draw from both parties, but McCain's plan does so in a way that favors the companies that got us in this mess in the first place
Message edited 10/10/2008 1:17:44 PM.
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| Posted 10/10/08 1:16 PM |
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jellybean78
:)
Member since 8/06 13103 total posts
Name:
Mommy
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Re: McCain's Mortgage Rescue Plan
Posted by hotelcalie
I don't feel people who were responsible in their purchases should have to bail out ppl who were not. I didn't buy above my means...why should I pay for people who did.
From McCain web site:
John McCain has proposed a new "HOME Plan" to provide robust, timely and targeted help to those hurt by the housing crisis. Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home's market value.
* Eligibility: Holders of a sub-prime mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30 year fixed-rate mortgage on the existing home.
o John McCain's HOME Plan Will Keep 200,000 To 400,000 Families From Losing Their Homes. "But at the same time, McCain is calling for aggressive federal action to help keep 200,000 to 400,000 families from losing their homes. That plan has many of the elements of a proposal by Rep. Barney Frank, D-Mass., and Sen. Chris Dodd, D-Conn., requiring participating lenders to forgive part of the loan principal and then write a new loan that would be backed by the federal government through the Federal Housing Administration." (Tom Raum, "Everyone's Invited: McCain Economic Plan Draws From Both Parties," Tucson Citizen, 4/17/08)
So not to start drama but those people who felt they "deserved" a home but knew they couldn't pay for it in the long run get bailed out. I don't get it....
I think the problem was most people that felt they "deserved" a home didn't have the means to pay for it and knew so when buying the home but since the banks were basically giving away mortgages to anyone they felt hey why shouldn't I buy a house too. Now those people who waited, put down payments and actually can afford their home get nothing for their smart choices. This is whats wrong with America....everyone wants what they think they deserve without actually working hard/saving for it.
I'm not saying all the homeowners in default are this way but a good majority are. If you make $75K a year you can't afford a $400K house with 3% down. PERIOD. I don't care what colorful mortgage your broker drew up the math doesn't add up.
Now my taxes are going to go up to bail out someone elses stupid mistake. Hey I could have went and bought a house with no money down but I didn't....why because I knew it wasn't in my best interest financially.
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| Posted 10/10/08 1:17 PM |
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bluegreen08
LIF Adolescent
Member since 10/07 574 total posts
Name:
a
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Re: McCain's Mortgage Rescue Plan
Posted by jacquig
Posted by hotelcalie
I don't feel people who were responsible in their purchases should have to bail out ppl who were not. I didn't buy above my means...why should I pay for people who did.
From McCain web site:
John McCain has proposed a new "HOME Plan" to provide robust, timely and targeted help to those hurt by the housing crisis. Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home's market value.
* Eligibility: Holders of a sub-prime mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30 year fixed-rate mortgage on the existing home.
o John McCain's HOME Plan Will Keep 200,000 To 400,000 Families From Losing Their Homes. "But at the same time, McCain is calling for aggressive federal action to help keep 200,000 to 400,000 families from losing their homes. That plan has many of the elements of a proposal by Rep. Barney Frank, D-Mass., and Sen. Chris Dodd, D-Conn., requiring participating lenders to forgive part of the loan principal and then write a new loan that would be backed by the federal government through the Federal Housing Administration." (Tom Raum, "Everyone's Invited: McCain Economic Plan Draws From Both Parties," Tucson Citizen, 4/17/08)
So not to start drama but those people who felt they "deserved" a home but knew they couldn't pay for it in the long run get bailed out. I don't get it....
I think the problem was most people that felt they "deserved" a home didn't have the means to pay for it and knew so when buying the home but since the banks were basically giving away mortgages to anyone they felt hey why shouldn't I buy a house too. Now those people who waited, put down payments and actually can afford their home get nothing for their smart choices. This is whats wrong with America....everyone wants what they think they deserve without actually working hard/saving for it.
I'm not saying all the homeowners in default are this way but a good majority are. If you make $75K a year you can't afford a $400K house with 3% down. PERIOD. I don't care what colorful mortgage your broker drew up the math doesn't add up.
Now my taxes are going to go up to bail out someone elses stupid mistake. Hey I could have went and bought a house with no money down but I didn't....why because I knew it wasn't in my best interest financially.
I completely agree with you. this helps those who bought houses out of their means, and the companies who profited off of those loans, and screws everyone else.
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| Posted 10/10/08 1:18 PM |
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Karen
Just chillin'!!
Member since 1/06 9690 total posts
Name:
Karen
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Re: McCain's Mortgage Rescue Plan
I think it's a horrible plan. It's one thing to give people better terms (which I'm not totally for), but to revalue their home and adjust their principal is BS!!
Posted by hotelcalie
* Eligibility: can prove creditworthiness at the time of the original loan;
I totally don't get this! If the people were credit-worthy at the time of the purchase, they wouldn't have needed a sub-prime mortgage to begin with!!!
So is McCain all talk??? He proposes this, knowing no one will be able to use it?
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| Posted 10/10/08 1:20 PM |
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jellybean78
:)
Member since 8/06 13103 total posts
Name:
Mommy
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Re: McCain's Mortgage Rescue Plan
Posted by Karen
I think it's a horrible plan. It's one thing to give people better terms (which I'm not totally for), but to revalue their home and adjust their principal is BS!!
Posted by hotelcalie
* Eligibility: can prove creditworthiness at the time of the original loan;
I totally don't get this! If the people were credit-worthy at the time of the purchase, they wouldn't have needed a sub-prime mortgage to begin with!!!
So is McCain all talk??? He proposes this, knowing no one will be able to use it?
I believe and someone correct me if I'm wrong that subprime mortgages were not only based on low credit scores but also like no doc mortgages, low down payment mortgages etc. I could be wrong though....
Also he needs to clearly define creditworthiness....there are different tiers.
Like about 720+ = excellent credit below 680 equals good credit (not sure of the exact #'s but something like that)
Also your credit score is determined by length of history, timely payments and debt ratio.
Someone with a good score of 680 could technically have alot of credit cards with balances, short credit history, etc. So just because that person has a "good" score IMO doesn't necesarily mean they are credit worthy enough to buy a home that may push their financial limits KWIM.
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| Posted 10/10/08 1:25 PM |
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bluegreen08
LIF Adolescent
Member since 10/07 574 total posts
Name:
a
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Re: McCain's Mortgage Rescue Plan
I feel like a lot of people are supporting McCain because of the proposed tax cuts. How could a program like this allow for cuts for anyone?
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| Posted 10/10/08 1:26 PM |
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Mommy2Boys
My Boys!!!!
Member since 6/06 14437 total posts
Name:
C
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Re: McCain's Mortgage Rescue Plan
Posted by Karen
I think it's a horrible plan. It's one thing to give people better terms (which I'm not totally for), but to revalue their home and adjust their principal is BS!!
Posted by hotelcalie
* Eligibility: can prove creditworthiness at the time of the original loan;
I totally don't get this! If the people were credit-worthy at the time of the purchase, they wouldn't have needed a sub-prime mortgage to begin with!!!
So is McCain all talk??? He proposes this, knowing no one will be able to use it?
I am hoping if he gets into office and proposes this Congress will be smart enough to vote it down...but who knows after they just approved the bail out
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| Posted 10/10/08 1:27 PM |
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cjik
Welcome 2010!
Member since 2/06 8879 total posts
Name:
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Re: McCain's Mortgage Rescue Plan
Posted by Karen
I think it's a horrible plan. It's one thing to give people better terms (which I'm not totally for), but to revalue their home and adjust their principal is BS!!
Posted by hotelcalie
* Eligibility: can prove creditworthiness at the time of the original loan;
I totally don't get this! If the people were credit-worthy at the time of the purchase, they wouldn't have needed a sub-prime mortgage to begin with!!!
So is McCain all talk??? He proposes this, knowing no one will be able to use it?
It might help people who were credit-worthy, but took on too big of a mortgage. I know we were strongly encouraged by our bank to take on a bigger mortgage and were told we could "buy more house than we seemed to think." We stuck with our plan though and bought less house--we knew we couldn't afford the amount the bank was willing to lend us. This was not a subprime mortgage, but a standard, fixed mortgage offered by Chase no less.
So it basically helps people who got in over their heads and should have known better, or thought they could get more loans when money got tight.
His plan doesn't sound good for home values either.
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| Posted 10/10/08 1:29 PM |
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MikesWife
Wanting...........
Member since 1/06 6887 total posts
Name:
Karen
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Re: McCain's Mortgage Rescue Plan
There HAS to be more to this plan because this is just plain stupid.
My 401(k) has dropped, is he going to revalue that for me to the pre-2008 stock market crash? NOOOO!!!!!
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| Posted 10/10/08 1:31 PM |
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JTK
my 4 boys!
Member since 6/06 7396 total posts
Name:
Kristi
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Re: McCain's Mortgage Rescue Plan
McCain will not be getting my vote.. this is a ridiculous plan
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| Posted 10/10/08 1:46 PM |
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bluegreen08
LIF Adolescent
Member since 10/07 574 total posts
Name:
a
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Re: McCain's Mortgage Rescue Plan
Posted by MikesWife
There HAS to be more to this plan because this is just plain stupid.
My 401(k) has dropped, is he going to revalue that for me to the pre-2008 stock market crash? NOOOO!!!!!
I agree... there has to be more to it, right? He was saying how great this plan was at the debates.
McCain supporters!!!!! please come out and clarify this 
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| Posted 10/10/08 1:46 PM |
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Blazesyth
*yawn*
Member since 5/05 8129 total posts
Name:
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Re: McCain's Mortgage Rescue Plan
Posted by bluegreen08
I agree... there has to be more to it, right? He was saying how great this plan was at the debates.
McCain supporters!!!!! please come out and clarify this
There might not be any more details.
The way it was just brought up out of the blue at the debate, it seemed like it was something they thought of in the car on the way driving there.
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| Posted 10/10/08 1:52 PM |
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cjik
Welcome 2010!
Member since 2/06 8879 total posts
Name:
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Re: Questions about McCain's Mortgage Rescue Plan
Posted by Blazesyth
Posted by bluegreen08
I agree... there has to be more to it, right? He was saying how great this plan was at the debates.
McCain supporters!!!!! please come out and clarify this
There might not be any more details.
The way it was just brought up out of the blue at the debate, it seemed like it was something they thought of in the car on the way driving there.
It probably was! I'm betting the notes were scribbled on a napkin over dinner.
Not making fun of McCain, I think both candidates are slow on the draw at offering solutions, though to be fair, no one, even the best financial gurus, seem to understand exactly what is happening or how bad things could get.
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| Posted 10/10/08 3:10 PM |
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