In the second presidential debate, McCain laid out his bailout plan to help average Americans in this economic crisis.
You know that home values of retirees continue to decline and people are no longer able to afford their mortgage payments. As president of the United States, Alan, I would order the Secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes -- at the diminished value of those homes and let people be able to make those -- be able to make those payments and stay in their homes.
What McCain failed to tell America is the critical detail of his plan, which differs from Obama's plan.
McCain's American Homeownership Resurgence Plan requires that struggling homeowners "prove their creditworthiness at the time of the original loan (no falsifications and provided a down payment)." Although downplayed in parentheses, homeowners would qualify for his plan ONLY if they had provided a down payment at the time of purchase.
This requirement fails to address exactly how the subprime lending bubble went from over-inflated to burst because the homeowners receiving those mortgages DID NOT have down payments. McCain's plan would do little to help these people, including many military members, who are at the heart of this crisis.
Military members were specific targets for the predatory lending practices engaged in by subprime lenders during the housing boom. The lenders knew that military members receive a guaranteed housing allowance and used those numbers to push for higher mortgage amounts. Even though military members and veterans have access to low-cost VA loans, the number of VA loans dropped drastically at the height of the subprime lending boom in 2006 to less than one-third of the level of VA loans two years earlier, no doubt in direct relationship to the subprime predatory lending practices.
Most shockingly, the foreclosure rate in military towns is 4 TIMES HIGHER than the national average.
Foreclosure filings in 10 towns and cities within 10 miles of military facilities, including Norfolk, Virginia, home of the Navy's largest base, rose by an average 217 percent from January through April from a year earlier. Nationally, the rate was 59 percent in the same period, according to RealtyTrac, which tallies bank seizures, auctions and default notices.
The biggest surge was in Columbia, South Carolina, home to Fort Jackson, where the Army trains recruits for combat in Afghanistan and Iraq. Properties in some stage of foreclosure rose 492 percent from a year earlier, RealtyTrac said. The second-biggest increase was 414 percent in Woodbridge, Virginia, next to the Marine Corps Base Quantico.
Currently, veterans comprise 11% of our population, but they make up 25% of our homeless. McCain's plan would leave military families without government assistance in this housing crisis and may even result in military families and more veterans being homeless.
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