McCain's Mortgage Buyout Plan Draws Criticism

Media analysts and economists are confused about presidential candidate John McCain's proposed "Homeownership Resurgence Plan," which would see Washington spend up to $300 billion to become a "lender of last resort."

1 minute read

October 9, 2008, 1:00 PM PDT

By Michael Dudley


"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."

Thursday, October 9, 2008 in Globe and Mail

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