By MICHAEL COOPER
Senator John McCain, who drew criticism last month after he warned against broad government action to solve the deepening mortgage crisis, pivoted Thursday and called for the government to help qualified homeowners with subprime mortgages refinance and get federally guaranteed 30-year mortgages.
“There is nothing more important than keeping alive the American dream to own your home, and priority number one is to keep well-meaning, deserving home owners who are facing foreclosure in their homes,” Mr. McCain said in Brooklyn, where he held a round-table discussion with small-business owners.
Mr. McCain, an Arizona Republican, said his plan would apply only to people who have subprime mortgages on their primary residences who could show that they would be able to meet the terms of a new, 30-year fixed-rate mortgage. He also called for the Department of Justice to investigate the lending industry.
Mr. McCain did not mention how much his plan would cost, but his economic advisers were scheduled to brief reporters later in the day.
In both tone and substance, Mr. McCain’s remarks were something of a departure from a speech the senator delivered last month in California in which he warned that “it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers,” and noted that there had been “rampant speculation” by both lenders and borrowers who had expected the values of homes to keep rising.
The Democratic presidential candidates tried to paint Mr. McCain as out-of-touch and uncaring after the California speech — Senator Hillary Rodham Clinton, who has proposed $30 billion in federal aid to states to help homeowners, said it sounded remarkably like Herbert Hoover” — and some Republicans expressed concern as well.
One of his supporters, Senator Mel Martinez of Florida, said after the speech that he would give Mr. McCain “an incomplete.”
“He stated the obvious, which is that we cannot rescue those who made poor investments and poor decisions,” Mr. Martinez said late last month on CNN. “However, where I think he fell short, and I think you will agree with me, is the fact that we need to do some things that can help families, that can help people.”
The Democratic candidates reacted dismissively to Mr. McCain’s new plan — which the senator announced at a window store in Bay Ridge, Brooklyn, a week before he plans to make what his aides are billing as a major speech on the economy.
Mrs. Clinton said in a statement that “Senator McCain is apparently of two minds on the housing crisis and neither seems to know how to steward the economy effectively.”
“Just two weeks ago,” her statement continued, “Senator McCain said he’d rather do nothing than something about the housing crisis and attacked my plan with tired right-wing talking points. Today, it looks like he’s proposing a warmed-over, half-hearted version of the very plan he criticized, to help families restructure mortgages to save homes and keep housing prices from falling further.”
And Senator Barack Obama — who was outlining his own proposal for a $30 billion economic stimulus package that included the creation of a $10 billion foreclosure prevention fund and $10 billion in relief for the state and local governments hardest hit by the crisis — said he was glad that Mr. McCain had “finally decided to offer a plan.”
“Better late than never,” Mr. Obama said in prepared remarks he planned to deliver in Gary, Ind. “But don’t expect any real answers. Don’t expect it to actually help struggling families. Because Senator McCain’s solution to the housing crisis seems a lot like the George Bush solution of sitting by and hoping it passes while families face foreclosure and watch the value of their homes erode. The American people can’t afford this kind of do-nothing approach. They need help immediately.”
Mr. McCain outlined several other proposals today, including one to stop filling the Strategic Petroleum Reserve in an effort to drive down the price of oil by driving down the demand.
Mr. McCain was introduced in Brooklyn by Michael R. Bloomberg — the ex-Democrat, ex-Republican, currently unaffiliated mayor of New York — whom the senator endorsed and campaigned for in 2001 when Mr. Bloomberg ran as a Republican. Mr. Bloomberg credited Mr. McCain with teaching him the rudiments of retail politics, and he fondly recalled a visit to the McCain ranch in Arizona and the barbecued ribs Mr. McCain made for him. “My recollection is they were slightly on the well-done side,” he said.
The truth is the homeowners, mortgage companies and lenders are all incompetent. If we bail out one we are bailing them all out. This is the taxpayers not the governments money. Truth is the price of a house has gone thru the roof and are they really worth what the builders are selling them for?