McCain's mortgage buyout plan
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McCain's mortgage buyout plan
| Thu, 10-09-2008 - 10:04pm |
What do you think of John McCain's proposal to spend 300 billion dollars in federal funds to buy distressed mortgages?

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I think it's nuts.
I don't think it would ultimately prove popular with most homeowners, either. What I imagine happening is this:
Say there's a small neighborhood of 10-20 single-family homes (average value of $100,000/home) , with 3 or 4 of the home-owners in the neighborhood holding "at risk" mortgages that are re-assessed and re-mortgaged at a new values of $70k. Let's assume you are paying your mortgage and in no danger of losing your home, so you are not eligible for the "bailout." When it comes time for you to move, and put your home on the market, what is it worth? If your neighbors with a virtually identical house listed their places for 70k you can bet you're not going to get 100k for your home. Suddenly all the homes in the neighborhood are devalued, but only the people about to foreclose are allowed to recoup the loss. Everyone else is suddenly in negative-equity land.
I may be wrong - I am not really a finance person, and there's a lot about this crisis that I "don't get," but that's my take, at first glance.
I think these people should just be aided in refinancing at a fixed rate for a 40- or 45-year mortgage. (Why is 30-years such a magic number?)
I think you're right, and it would be a much better idea to switch the loans to longer term fixed rates.
Sopal
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McCain's idea to throw another $300 billion on top of the $700 billion is not a good one, to be charitable. First of all, it runs counter to everything the man has been saying about balancing the budget. Second, why not see if the $700 billion works first before we throw in another $300 billion? Third, given that he threw it out there at a debate in which he needed to turn the momentum against Obama, it just smacks of more politics.
It's time for a change. After all these years under the Republicans, they are leaving us with a huge mess in our economy, very costly long-term occupations of two countries that are not going well, and bin Ladin still on the loose.
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http://www.pnhp.org/news/2009/october/meet_the_new_health_.php
http://www.youtube.com/watch?v=DQTBYQlQ7yM
Sopal
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