McCain pitches a mortgage plan
His proposal to help 'deserving' homeowners could assist up to 400,000
people, aides say. He'd previously expressed concern about bailing out
speculators.
By Maeve Reston, Los Angeles Times Staff Writer
April 11, 2008
NEW YORK -- Amid widespread concerns about the nation's mortgage
crisis, John McCain outlined Thursday a proposal to help "well-
meaning, deserving homeowners who are facing foreclosure" and called
for a Justice Department investigation into possible "criminal
wrongdoing" by unscrupulous lenders.
The proposals marked a ****ft in tone from McCain's admonition two
weeks ago against adopting a mortgage plan that would be "a
multibillion-dollar bailout for big banks and speculators." That set
the Arizona senator apart from his Democratic rivals in the
presidential contest, Sens. Hillary Rodham Clinton of New York and
Barack Obama of Illinois, who have both said there is a need for
government intervention to fight the nation's wave of home mortgage
foreclosures and overall economic slowdown.
McCain, in a campaign stop at a windows business in Brooklyn, said,
"There is nothing more im****tant than keeping alive the American dream
to own your home, and priority No. 1 is to keep well-meaning,
deserving homeowners who are facing foreclosure in their homes."
In advance of his plan to spell out more details about his economic
proposals next week, McCain also cited rising gas prices and other
hard****ps for small-business owners and their employees.
"Today our economy is weakening, and as I travel this country and meet
and talk with people, I can see how things are getting tougher for
many Americans," he said before sitting down with half a dozen small-
business owners to hear their concerns.
McCain's aides said his home mortgage plan could help 200,000 to
400,000 people and cost $3 billion to $10 billion. That would be far
less than the proposals offered by Clinton and Obama, but McCain aides
said it would be bigger than the efforts envisioned by the Bush
administration.
The plan would retire old loans that homeowners no longer can pay and
replace them with less expensive, 30-year, fixed-rate mortgages that
are federally guaranteed. McCain said families would gain "the
op****tunity to trade a burdensome mortgage for a manageable loan that
reflects the market value of their home."
In line with his concern about bailing out speculators, McCain's
proposal would apply only to homeowners who took out sub-prime
mortgages after 2005 for homes that are their main residence. They
would need to have proved they were credit-worthy at the time of the
loan.
"The taxpayer gets something back for their guarantee of the mortgage;
the lender gets something back for having taken a haircut . . . and
the [homeowner] gives up something, which is some increase in the
value of the house," said Douglas Holtz-Eakin, a McCain economics
advisor. "You've got to sacrifice to get some help."
McCain offered tepid sup****t for the bipartisan homeowners-relief
measures moving through Congress, but Holtz-Eakin said McCain found
many aspects of the legislation "disappointing."
On Thursday, the Senate approved its effort to address the nation's
housing crisis, setting the stage for negotiations with the House.
Obama criticized McCain's plan while campaigning in Gary, Ind.
Although he called the proposal "better late than never," Obama added:
"Sen. McCain's solution to the housing crisis seems a lot like the
George Bush solution of sitting by and hoping it p***** while families
face foreclosure and watch the value of their homes erode."
Clinton, in a prepared statement, chided McCain on Thursday for
pivoting from the more laissez-faire approach to the housing crisis he
outlined during an appearance in Santa Ana two weeks ago.
"Now he's changed positions and is finally responding to a housing
crisis that has been going on for months, but unfortunately his
actions are only half-measures," she said.
McCain unveiled his plan at Windows We Are Inc., located down the
street from the Verrazano-Narrows Bridge.
He was introduced by New York Mayor Michael R. Bloomberg, who
reminisced about McCain campaigning with him when he first ran for
mayor, in 2001.
Bloomberg also recalled a visit several years ago to McCain's retreat
outside Sedona, Ariz. He joked that the home and surrounding property
were "relatively small" to be called a ranch and recalled that
McCain's trademark ribs, which he grills himself, "were slightly on
the well-done side." But Bloomberg said he "loved them anyways."
McCain, before leaving Brooklyn, also found time for a food adventure,
stopping at a nearby pizzeria.
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