Some Questions on McCain's ReSURGEance Home Plan

Posted: Oct 08, 2008 1:45 PM
If you couldn't tell from my post below, I think the McCain housing plan is a disaster. It's Dodd-Frank on steroids. I didn't get the chance to ask any questions in the conference call earlier, but here is what was one my mind:

1. Why are you replicating the Dodd-Frank legislation bailout in your plan? Their plan gave $300 billion to FHA to guarantee failed mortgages. It passed in July. Shouldn't we give that some time to work? (or fail completely?)

2. Why does your plan empower the Treasury Secretary to buy up these failed mortgages and renegotiate them? Shouldn't that power be given to an existing housing agency, like FHA or HUD?

3. How does the program decide which mortgage holders to help?  About 27% of US households have paid off their mortgages and 32% of households rent.  How can you ask responsible borrowers and renters to pay for this program?

4. Many people cashed out equity and now carry second mortgages, will second mortgages be eligible?

5. Does the Senator think that the original TARP program does not need the full $700 billion?  If so, wouldn't it be better to return this $300 billion to deficit reduction?

6. There's no evidence the housing market has bottomed out yet.  What if housing prices drop another 15 or 20 percent after their mortgages are renegotiated and the homeowners are under water again?