Uhhh... They're already doing this. It is in the proposal in the bailout bill.

No. They are not. McCain has suggested that he would direct his Treasury Secretary to parcle out $300 billion from the $700 billion for this plan.

http://blogs.wsj.com/washwire/2008/1...surgence-plan/

AMERICAN HOMEOWNERSHIP RESURGENCE PLAN

John McCain will direct his Treasury Secretary to implement an American Homeownership Resurgence Plan (McCain Resurgence Plan) to keep families in their homes, avoid foreclosures, save failing neighborhoods, stabilize the housing market and attack the roots of our financial crisis. America's families are bearing a heavy burden from falling housing prices, mortgage delinquencies, foreclosures, and a weak economy. It is important that those families who have worked hard enough to finance homeownership not have that dream crushed under the weight of the wrong mortgage. The existing debts are too large compared to the value of housing. For those that cannot make payments, mortgages must be re-structured to put losses on the books and put homeowners in manageable mortgages. Lenders in these cases must recognize the loss that they've already suffered.

The McCain Resurgence Plan would purchase mortgages directly from homeowners and mortgage servicers, and replace them with m anageable, fixed-rate mortgages that will keep families in their homes. By purchasing the existing, failing mortgages the McCain resurgence plan will eliminate uncertainty over defaults, support the value of mortgage-backed derivatives and alleviate risks that are freezing financial markets.

The McCain resurgence plan would be available to mortgage holders that:

· Live in the home (primary residence only)
· Can prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment).

The new mortgage would be an FHA-guaranteed fixed-rate mortgage at terms manageable for the homeowner. The direct cost of this plan would be roughly $300 billion because the purchase of mortgages would relieve homeowners of "negative equity" in some homes. Funds provided by Congress in recent financial market stabilization bill can be used for this purpose; indeed by stabilizing mortgages it will likely be possible to avoid some purposes previously assumed needed in that bill.

The plan could be implemented quickly as a result of the authorities provided in the stabilization bill, the recent housing bill, and the U.S. government's conservatorship of Fannie Mae and Freddie Mac. It may be necessary for Congress to raise the overall borrowing limit

So like Lakai said, they would be allocating money from the already proposed $700 billion buyout that is happening anyway, right?

Lakai is partiall right. However, there has been no significant discussion regarding the govt. buying bad mortgages and re-doing them under the current market value. Instead, Paulson's plan was to infuse the financial institutions with the $700 billion to keep the market afloat.

I agree that the current bill, as written, would give the Treasury the authority to allocate a portion of the $700 billion funds for this purpose.

But my point is where is the money coming from to buy these bad mortgages? The taxpayers.

well at least it is already part of the $700B bailout that was passed, not an add-on to it.

Right, the $700 billion buyout is going to happen anyway and will be a tax burden on the tax payers regardless. McCain's plan is just an allocation of those funds we are already going to be paying for.

It could be worse, it could be going to waste of time organizations like Acorn, so they can have more funds for thier voter fraud scams, or to give to companies that produce wooden arrows.

Lets go with the facts. The bailout is not $700 billion it is $810 billion. It will be used to buy trouble assets from financial institutions and restore liquidity into the system. Troubled assets mainly consist of mortgage backed securities . The problem with this bill is that it is that it was not made to solve the problem. It is to only suppress the problem in the short term.

I like McCain's proposal and here is why.

Risky Mortgages are only the tip of the iceberg and not the only cause for the market going down so much. A majority of people do not understand the HUGE underlying problem of Credit Default Swaps (CDS). CDS are mainly unregulated insurance policies. There is estimated to be around $50-60 TRILLION worth of CDS floating around, no one can really know the exact figure because they can be hidden off the books. Unless we can stop foreclosures, these CDS will have to be paid out making nearly every bank to be wiped out.

McCain's proposal would prevent a large number of foreclosures, giving enough time for these CDS to expire (usually around 5 years) and pass laws to regulate banks from predatory lending and everything else that got us in this mess in the first place.

People balk at the $300 billion price tag, but don't really understand that it is very small price to pay for an actual SOLUTION. There are millions of ARM loans that have yet to reset. Anything that would prevent or minimize more foreclosures is the only way to solve our economic problems.

Can you tell me what Obama is proposing ??

change...duh. :rofl:

Change...:rofl:

I agree with you and McCain's proposal.

Damn it...Wagner beat me to it.