Bunch of people defaulting on their mortgages. Some are due to the fact that their property value is now less than their mortgage. Like a bad car deal they are "upside down" in their house.
So what is Mr. Mcfix-it gunna do? Announcing a half baked plan during his debate, he claims to be able to buy up the mortgages and then renegotiate the mortgage to match the house value. Sound simple? It is! Simple-minded. When the real estate market was rocking it had built up a massive infrastructure of loan underwriters who are the humans with the expertise necessary to evaluate these new mortgages. They could hardly keep up with the boom and the whole system slowed down. With McCains plan most homeowners in America would want a mortgage reduction wouldn't they? Even if you have standards to apply, you have to apply them to each case. So one guy is in over their head on the mortgage and is getting foreclosed on. McCain to the rescue, saves his home! What a hero. Then every other person on that street defaults on their mortgage because they are getting screwed by their neighbor's mortgage reduction which would allow him to sell his house for much less and it will drive down real estate prices for everyone! Thanks John! Super! And these new mortgages would need forensic accounting and underwriting because so many loans made were stated income or fraud loans. Without this level of underwriting the value of the mortgage backed securities made up of these new mortgages would be almost zero. In other words, McCain claims he is going to re-do millions of loans better this time. He is going to do it all right this time. And all without any infrastructure of loan experts who have fled the field. So is he gunna train new people to do it all? And what institutions are gunna hold the paper that were re-negotiated? BTW do you think fraud could creep into such a massive project? Ya think? This is only the beginning of the bullshittery contained in his claim. It is cockamamie pandering and if implemented will cause the current real estate turmoil to extend through the decade. It will further depress home values in all the major markets. And all on OUR dime! Typical McCain to try to reduce a complex problem into a slogan and get it all wrong in his haste to pander to a small group. Just like he did by hastily picking Sarah "Green Acres" Palin. Mr. Bad Judgment Grumpy Pants would be a disaster in the White House.