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.
