McCain's Mortgage Buyout Plan Draws Criticism

"At the beginning of Tuesday night's presidential debate, Mr. McCain unveiled a hugely ambitious and hugely expensive proposal to help solve the mortgage crisis that is at the root of the economic distress afflicting Americans and everyone else. If elected president, he would turn the United States government into the lender of last resort for homeowners at risk of defaulting on their mortgage.

The plan is called the American Homeownership Resurgence Plan...It would rescue people at risk of losing their homes by having the government take over their mortgage and provide a new one on better terms.

The government would purchase the mortgage from the lender and renegotiate a new mortgage with the homeowner, based on the home's reduced value, at a rate significantly lower than that offered by the banks. The cost: $300-billion.

But there are questions. Boy, are there questions."