However, he does back most of the Bush administration's initiatives, including an interest rate freeze on sub-prime mortgages…
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The housing crisis is a big issue for many voters. Not surprisingly, John McCain and Barack Obama offer vastly different plans to solve it. Let's see where they stand.
BY PAT SUMMERS
Republican nominee John McCain has stated repeatedly that he believes in a 'hands-off' approach to the foreclosure crisis. He's openly derisive of the idea of government intervention, insisting it's important to let the markets play out.
However, he does back most of the Bush administration's initiatives, including an interest rate freeze on sub-prime mortgages. He also supports expanding the FHA and the idea of suspending tax on mortgage-debt forgiveness--two plans that are extremely controversial.
Most recently, McCain introduced what he calls a 'solutions based plan' to target the mortgage crisis. McCain's plan, known as the HOME plan, provides targeted refinance assistance to those homeowners who can prove that they are creditworthy and are able to meet the terms of a new 30-year fixed-rate mortgage.
There is a small possibility that McCain will expand on this plan. Several of his recent campaign advertisements (in swing-states) proclaim a desire to fight foreclosures. It's unclear whether he is serious about this or just telling people what he thinks they want to hear.
Democratic nominee Barrack Obama has another take on mortgage bailouts. Unlike John McCain, he fully supports government intervention.
Obama thinks it is possible to stop the housing market's downward spiral by helping Americans avoid foreclosure. He endorses the $300 billion government bailout proposed by Senator Chris Dodd of Connecticut and Representative Barney Frank of Massachusetts.
The bailout makes use of a Federal Housing Administration program to get struggling borrowers refinanced into fixed-rate, taxpayer-insured mortgages. The plan is controversial as taxpayers will be forced to pick up the tab should borrowers default on the government-guaranteed debt.
There is also controversy over using a program meant for low-income housing for such a purpose. It's estimated that the bailout will only help 500,000 to 1,000,000 people, which means that on average the tax-insured mortgage would fall somewhere between $300,000 and $600,000. The people who would be helped don't exactly fall into the low-income category.
In addition to the $300 billion program, Obama is also calling for a tax credit to cover 10 percent of the mortgage payments that select families pay and another $10 billion for helping homeowners facing foreclosure.
To get borrowers to leave a house--and leave it in good condition--mortgage lenders around the nation have begun offering cash for keys. Some lenders are paying out upwards of $3,000.
Democrats unveiled a new plan last week that will allow the FHA to buy $300 billion in delinquent, underwater mortgages. The initial cost to taxpayers is estimated to be $20 billion.
Should mortgage borrowers at risk of losing their home be given a bailout? What about lenders who face lost profits? Four recent polls ask Americans where they stand on these issues.
Many people may be losing their homes to foreclosure because of legitimate financial crises, but there are even more people losing their homes because of lender follies as well as their own greed and stupidity. Here are five stories in particular that will be sure to induce fits of eye-rolling.
If you have followed the news at all over the last few months, then you know that the public has been spoon fed a spate of tearjerker news stories that are meant to paint struggling mortgage borrowers as victims. These stories talk about the importance of staving off foreclosures and helping people who need it, but they very rarely touch on the truth of the matter: most mortgage borrowers were reckless and do not deserved to be rescued.
Are you familiar with home loan terminology like adjustable rate, credit score and interest-only? Knowing this home loan jargon can help you become a savvy home buyer and allow you to better understand a realtor or lender. Read this article for explanations of these home loan terms.
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Are you considering a new home loan? One type of new home loan is a balloon mortgage, which allows homeowners to make lower mortgage payments. Read this article to learn if a balloon mortgage home loan fits your financial needs.
Do you know where your credit stands? Knowing your credit standing can help you be better prepared when you meet a lender to discuss your home loan application. Read this article to learn how you can prevent being rejected by a lender.
The U.S. government is working to develop a few different programs that are meant to stave off foreclosures. Policymakers may claim that these programs are for struggling mortgage borrowers, it's obvious that their real goal is to bail out the mortgage lenders. The question is: do reckless lenders really deserve to be rescued?