October 8th, 2008
12:00 PM ET
6 years ago

McCain mortgage plan shifts costs to taxpayers

Sen. John McCain
Sen. John McCain

NEW YORK (CNNMoney.com) - Under a mortgage rescue plan announced at the debate Tuesday night by Senator John McCain, much of the burden of paying to keep troubled borrowers in their homes will shift to taxpayers.

McCain's original plan called for lenders to write down the value of these mortgages, and take those losses. McCain unveiled the new $300 billion plan in response to the first question of the debate.

He said, "I would order the Secretary of Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes, at the diminished values of those homes, and let people make those – be able to make those payments and stay in their homes."

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Filed under: Candidate Barack Obama • John McCain
soundoff (428 Responses)
  1. Rudy NYC

    "Burden Shifts to Taxpayers"

    Wasn't the taxpayer paying for the old plan, too?

    Look, here's the problem. Home "values" showed 30 years of appreciation in just a handful of years. The final "selling" price had little or nothing to do with the actual "value" price of these homes. Selling prices were being determined by how much an institution was willing to lend, not the actual value of the home.

    Plus, not all of these bad mortgages are to low income or minority customers as some would lead you to believe. The vast majority of them are to folks who took out 2nd mortgages on the "increased value" of their homes.

    Don't forget that increased values mean higher property taxes on the local level, so the federal government could cut some funding to states and counties nationwide. These funding cuts were to be the tax cuts given to the "Trickle Down" crowd.

    Did you notice the dates involved with the 'Big Bailout"? It was rejected during one fiscal year, but approved during a new one.

    October 8, 2008 12:49 pm at 12:49 pm |
  2. Oregon calling

    Go Figure! I wonder if he really has any ideas anymore?!?!

    Obama / Biden 08

    October 8, 2008 12:49 pm at 12:49 pm |
  3. Democrat in VA

    Why should the tax payers take care of this mess? Why not force the banks to fix this mess. They raised the interest rates on loans from 6% to 18% and forced people from their homes. Let's make them reverse the interest rate BACK DOWN to 6% and let these people pick back up paying their mortgages. I'm sure at least 75% of them could make their morgage payment before the banks got so greedy and raised the interest rate so high.

    NO MORE FREE RIDES FOR BIG BANKS!!! MAKE THEM RE-NEGOTIATE WITH THEIR CUSTOMERS.

    6% of something is better than 18% of NOTHING.

    October 8, 2008 12:49 pm at 12:49 pm |
  4. Amy

    300,000 billion? Are you insane?

    Thanks McCain, for suggesting that my family and I take on the mortgages of all those who can't pay!

    I have lived in my current home for 17 years. I will pay off my mortgage in 2022. Why should my family have to pay for the mortgages of others? I have kids to put through college. I have gas to buy. I have insurance premiums to pay. And last week I, along with every other American, took on the debt of Wall Street.

    I WILL NOT TAKE ON THIS DEBT TOO!

    October 8, 2008 12:50 pm at 12:50 pm |
  5. andrew s. rostolder hillsdale nj

    poor sarah, the pitbull will have to go back to pulling dog sleds.......

    October 8, 2008 12:50 pm at 12:50 pm |
  6. Anonymous

    About the debate: does anyone find it curious that the last really substantive question went to McCain and it was froma Navy man, allowing McCain to approach him, shake his hand, and "empathize"?

    If this wasn't a setup by the McCain-sympathizing, right-leaning Brokaw, I don't know what is.

    October 8, 2008 12:50 pm at 12:50 pm |
  7. JL

    So now we pay for other peoples mortgages?

    JOHN MCCAIN -- THE -- COMMUNIST!

    October 8, 2008 12:50 pm at 12:50 pm |
  8. Francesca

    McCain the flip flopper!
    Early in the campaign, McCain stated the housing crisis is the borrowers own fault and that there wasn't a housing crisis. Now that Obama is winning all swing states, McCain has changed his platform on the housing crisis with a rescue plan of 3 Billion.

    Sounds like a liberal to me!

    October 8, 2008 12:51 pm at 12:51 pm |
  9. Recovering Republican

    I think I heard the best quote on "Weekend Update" on SNL last Saturday:

    You know that house you bought that you couldn't afford? Well, you're paying for it now.

    Vote common sense, not lipstick!

    October 8, 2008 12:51 pm at 12:51 pm |
  10. talkingpengwin

    McCain is showing yet again how he doesn't elaborate during the debates, when people are really watching him. He somewhat elaborates through press releases or in front of crowds that already love him. What a coward.

    October 8, 2008 12:51 pm at 12:51 pm |
  11. Paying My Mortgage

    So what about my mortgage John? It is less than my home value and I make my payment every month. Do I get help?

    October 8, 2008 12:51 pm at 12:51 pm |
  12. Diane

    No Way! My hushband and I have carefully paid our mortgage over the last 20 years and now I'm supposed to bail out the over-extended yuppies in our neighborhood! You know the ones that drive the leased MBZ SUV's and Beamers with credit card maxed out! No Way!

    October 8, 2008 12:51 pm at 12:51 pm |
  13. Dal CA

    Ah was it the big banks creating those special loans to enrich themselves or was it the people who were told that they could buy their dream.
    The greed started by the Banks was sold to the unsuspecting public who did not understand the instrument they were signing.
    One thing more some of the bank executives did not understand the instruments they were selling either.
    The banks should buy those loans back and not us.

    October 8, 2008 12:51 pm at 12:51 pm |
  14. kobs

    As always he finds ways to surpport the rich and dump on the poor who he taxes !!! When it is good the share holders benefit and when bad mutuellize the loss !!! Mcxame

    October 8, 2008 12:51 pm at 12:51 pm |
  15. Greg in MN

    Does McCain ever think about the things that come out of his mouth before they hit the air?

    My guess is, he wanted to do something "mavericky" and dramatic by saying "I have a plan that will solve everything RIGHT NOW!" But instead, like all his plans, they end up costing tax payers more than every other plan.

    Please send this story to EVERYONE you know! McCain is too dangerous for our bank accounts!

    October 8, 2008 12:51 pm at 12:51 pm |
  16. Ken in NC

    Now this sounds like the ultimate "Flip Flop". This is a hard core conservative putting a hard core Liberal Plan out there when he said, "I would order the Secretary of Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes. TALK ABOUT A FLIP FLOP. WOW.

    Last night Senator McCain made me glad and positive that I am voting the "THAT ONE"/Biden ticket on November 4th.

    October 8, 2008 12:52 pm at 12:52 pm |
  17. Bruce

    What McCain does not want you to KNOW: The New York Times has published a separate list looking at contributions from "directors, officers, and lobbyists for Fannie Mae and Freddie Mac" for the 2008 campaign cycle. That list — using figures from the Federal Election Commission — shows McCain receiving $169,000, while Obama received only $16,000

    October 8, 2008 12:52 pm at 12:52 pm |
  18. OS

    McCain,

    Before trying to become the president of this great country, please try to learn to be civil and good mannered – you don't address your opponent during a world wide telecast debate as 'That'.

    October 8, 2008 12:52 pm at 12:52 pm |
  19. Brain in DC

    Is this the free enterprise? Are we nationalizing individuals home debt? Now who's accusing who of socialism???!

    October 8, 2008 12:52 pm at 12:52 pm |
  20. JJ

    When I heard this coming out of his mouth last night, I stood up and yelled at the TV.

    October 8, 2008 12:52 pm at 12:52 pm |
  21. Tony

    I SAID IT FROM THE DAY MCCAIN WAS SELECTED AS THE NOMINEE.

    PEOPLE HAD BETTER GET IT TOGETHER AND REALIZE TAHT IF MCCAIN AND PALIN HAD A CHANCE TO ACTUALLY WIN, YOU COULD KISS YOUR JOBS, PENSIONS, 401(k0'S, RETIREMENT SAVINGS, ETC. GOODBYE!

    I KNOW THERE ARE STILL LIFE-LONG REPUBLICANS OUT THERE WHO WILL VOTE PARTY AND ONLY PART, BUT IF YOU CARE ABOUT YOUR FAMILY, YOUR CHILDREN, AND YOURSELF, YOU WILL VOTE FOR OBAMA / BIDEN.

    IF YOU ARE CONTENT AND HAPPY WITH THE LAST 8 YEARS AND WON'T MIND ANOTHER FOUR, THEN BY ALL MEANS VOTE FOR MCCAIN AND PALIN.

    THINGSARE BAD NOW, ELECT MCCAIN AND PALIN AND WATCH THINGS GET MUCH, MUCH WORSE AND VERY QUICKLY.

    October 8, 2008 12:52 pm at 12:52 pm |
  22. Stacy from Loudoun County, VA

    Senator McCain's economic message is erratic at best, chaotic and dangerous at worst. On one hand, he talks about spending freezes and cutbacks then on the other hand he talks about yet another huge bailout. Fiscal Conservatives have got to be blowing blood vessels in their temples at this point.

    Senator Obama proposes to spend money for the energy sector with hopes of it making money in the long term. Any more deficit spending had better be value added spending at this point because we cannot afford too many more free money Republican giveaways.

    October 8, 2008 12:53 pm at 12:53 pm |
  23. Michael

    This is a good idea – in fact, it sounds like a Democratic idea – but is Senator McCain willing to tell us how he would pay for it? He wants to cut taxes and also spend $300 billion on this plan. That is not reasonable. Will he be honest and tell the voters that he either needs to raise taxes, cut another $300 billion out of the budget (which is already running a record deficit), or borrow the money and add to the deficit. Which is it, Senator? I like this idea, but coming from McCain, it sounds like another desperate ploy to attract voters. It is a 180-degree turn from "small government" Republican philosophy, and not consistent with McCain's record.

    Sorry, Senator, but I just don't buy it. I want Democratic ideas like this, but I can get them by voting for the Democratic candidate. I don't need the "new" John McCain to give me what Barack Obama has been offering all along.

    October 8, 2008 12:53 pm at 12:53 pm |
  24. Sweetie

    Making it possible for folks to stay in their homes and make regular payments is a really good idea!

    We the People (Taxpayers) will not be stuck paying for empty de-valued property that isn't doing anyone any good.

    Vote for Experience!

    McCain/Palin-08

    October 8, 2008 12:53 pm at 12:53 pm |
  25. Shelly

    With bone-head ideas like this – people are just going to stop paying their mortgages all together so they too can be bailed out. I should rush out and buy a house way beyond my means!

    October 8, 2008 12:53 pm at 12:53 pm |
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