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Thread: McCain Warns Against Hasty Mortgage Bailout

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    McCain Warns Against Hasty Mortgage Bailout

    [URL="http://www.nytimes.com/2008/03/25/us/politics/25cnd-mccain.html?hp=&adxnnl=1&adxnnlx=1206472369-T+pMFU41QpdXm70Q86sURg"]NY TIMES[/URL]

    Drawing a sharp distinction with the Democratic presidential candidates, Senator John McCain, warned Tuesday against hasty government action to solve the mortgage crisis, saying “it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.”

    In an address focusing on domestic issues following his visit to the Middle East, Mr. McCain, the presumptive Republican nominee, did not propose any government bailout.

    “Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy,” Mr. McCain said, speaking before a business group in Santa Ana, Calif.

    His comments came a day after Senator Hillary Rodham Clinton called for aggressive federal intervention to help troubled homeowners, including directing $30 billion to states to help homeowners at risk of foreclosure. Mrs. Clinton’s Democratic opponent, Senator Barack Obama, has similarly called for active federal intervention, including a $10 billion relief package to prevent foreclosures.

    As the mortgage crisis has rippled through the economy, it has thrust itself to the forefront of the presidential race. But Mr. McCain’s remarks on Tuesday represented a stark tonal shift from the increasing calls for helping homeowners, as he faulted not only borrowers who engaged in risky lending, but suggested that some homeowners engaged in dangerous financial practices.

    “Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates,” he said.

    Mr. McCain argued that even during the ongoing crisis, the vast majority of mortgage holders continued to make their payments.

    “Of those 80 million homeowners, only 55 million have a mortgage at all, and 51 million homeowners are doing what is necessary — working a second job, skipping a vacation and managing their budgets to make their payments on time,” he said. “That leaves us with a puzzling situation: how could 4 million mortgages cause this much trouble for us all?”

    Mr. McCain split the blame between the rising housing bubble and the use of confusing and complex financial arrangements, which he said were badly understood even by financial managers. He said initial losses, coupled with the lack of transparency, has caused a “crisis of confidence in the markets.”

    “Capital markets work best when there is both accountability and transparency,” he said. “In the case of our current crisis, both were lacking.”

    Any government assistance must be accompanied by measures to ensure the problems are not repeated, Mr. McCain said. He said homeowners and lenders must be clear from the outset about the terms and obligations of any mortgage.

    “We must have greater transparency in the lending process so that every borrower knows exactly what he is agreeing to and where every lender is required to meet the highest standards of ethical behavior,” he said.

    Mr. McCain did not rule out a bailout, instead saying any such aid should be temporary and “no assistance should be given to speculators.”

    “Any assistance for borrowers should be focused solely on homeowners, not people who bought houses for speculative purposes, to rent or as second homes,” he said.

    Democrats criticized Mr. McCain’s approach, arguing that it would not do enough to address the financial problems facing Americans.

    “Instead of offering a concrete plan to address the crisis at all levels, McCain promised to take the same hands off approach that President Bush used to lead us into this crisis,” Howard Dean, the Democratic National Committee chairman, said in a statement. In his speech, Mr. McCain did not provide specifics about any immediate plans to deal with the crisis, saying he was “prepared to examine new proposals and evaluate them based on these principals.”

    He also called for a meeting of the nation’s top mortgage lenders, asking them to pledge support for customers and homeowners.

    “Working together, they should pledge to provide maximum support and help to their cash-strapped but credit-worthy customers,” he said. “They should pledge to do everything possible to keep families in their homes and businesses growing.”

  2. #2
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    Is McCain basing his economic policy on the policies of President G W Bush or President Hoover?

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    [QUOTE=Buster;2449645][URL="http://www.nytimes.com/2008/03/25/us/politics/25cnd-mccain.html?hp=&adxnnl=1&adxnnlx=1206472369-T+pMFU41QpdXm70Q86sURg"]NY TIMES[/URL]

    Drawing a sharp distinction with the Democratic presidential candidates, Senator John McCain, warned Tuesday against hasty government action to solve the mortgage crisis, saying [B]“it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers.”[/B][/QUOTE]


    :clapper::clapper::clapper::clapper:

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    I will say that I prefer McCain's plan --to do nothing, basically-- to Clinton's plan to put a five-year freeze on many adjustable-rate mortgages, which would result in massive rate increases for future borrowers. Possibly the dumbest idea ever, form the perspective of someone who is planning to sell a place and buy a new one --with a new mortgage-- during the next year.

    Obama's plan, I think, is the best here: He opposes rate freezes and foreclosure freezes, which he sees as clumsy government meddling, but puts in place greater penalties for mortgage fraud and predatory lending --systemic issues that helped create this crisis and need to be addressed going forward-- and also expands the mortgage-interest tax credit to help homeowners who might be having a hard time making payments.

    This is an area where he's not nearly as leftist as many would have you think, as he was actually well to the right of Clinton and Edwards on this issue.

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    Finally one of the candidates has the balls to say the right thing!!!:yes:

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    [QUOTE=Come Back to NY;2449799]:clapper::clapper::clapper::clapper:[/QUOTE]

    +1. Instead of letting people get out of one mess, only to get in another one down the road, we need to figure out how to educate people, while they are still in school, on how to manage their money. It's one of the most overlooked areas in our education system.
    Last edited by Maury77; 03-25-2008 at 08:24 PM.

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    [QUOTE=nuu faaola;2449834]I will say that I prefer McCain's plan --to do nothing, basically-- to Clinton's plan to put a five-year freeze on many adjustable-rate mortgages, which would result in massive rate increases for future borrowers. Possibly the dumbest idea ever, form the perspective of someone who is planning to sell a place and buy a new one --with a new mortgage-- during the next year.

    [B]Obama's plan, I think, is the best here: He opposes rate freezes and foreclosure freezes, which he sees as clumsy government meddling, but puts in place greater penalties for mortgage fraud and predatory lending --systemic issues that helped create this crisis and need to be addressed going forward-- and also expands the mortgage-interest tax credit to help homeowners who might be having a hard time making payments.[/B]

    This is an area where he's not nearly as leftist as many would have you think, as he was actually well to the right of Clinton and Edwards on this issue.[/QUOTE]

    he does have the best approach so far..

    it has to be something in between ignore the problem and throw money at it....

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    [QUOTE=nuu faaola;2449834]

    Obama's plan, I think, is the best here: He opposes rate freezes and foreclosure freezes, which he sees as clumsy government meddling, but puts in place greater penalties for mortgage fraud and predatory lending --systemic issues that helped create this crisis and need to be addressed going forward-- and also expands the [B]mortgage-interest tax credit to help homeowners who might be having a hard time making payments[/B].

    .[/QUOTE]

    There oughtta be a law...
    [U]when pols from either side [/U]make such promises, they indicate the $ reduction in revenue to the govt and if this is addl deficit spending or if this at the expense of another govt benefit. The govt is like my wife, she's got a million great plans which would cost a fortune, I yes her to death and only follow through on what I can afford.

    BTW---how does the govt weed out struggling homeowners from non-struggling homeowners and apply it to a tax code...

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