Sen. John McCain addressed small business owners in Brooklyn, N.Y. this Thursday that the government should play a bigger role in easing the mortgage crisis. McCain has called for federal aid to distressed homeowners Thursday, saying, “There is nothing more important than keeping alive the American dream to own your own home.”
Under McCain’s “HOME Plan,” homeowners facing foreclosure could apply for federal assistance, and the government would help them get new, affordable loans. Homes would have to be owners’ primary residences, and owners would have to prove that they could afford the new loans, which would be 30-year, fixed-rate mortgages.
The government would verify that the owner told the truth about his financial situation when he applied for the original mortgage and was able to make a down payment when getting his original loan, according to a campaign adviser.
Lenders would voluntarily write down the loans based on the home’s current market value and give the borrower at least a 10% equity stake. If the borrower later sells the home at a price higher than the refinanced loan, the lender and the federal government each would receive a portion of the sales price. They would be entitled to as much as one third of the loan’s reduction in principal.
So under McCain’s plan, if a borrower owes $150,000 on a home worth only $100,000, the lender would have to reduce the loan to $90,000. The $60,000 difference in principal would be split three ways: The lender and federal government would get as much as $20,000 each, depending on how much the home sells for when the borrower moves, and the owner would get the rest.
The new mortgage would be a 30-year fixed rate loan, and the government would back 80% of the new loan.
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Not good enough. When are they going to go after loan servicers like Litton Loan who are forclosing on homeowners even when they pay their mortgage payments. Litton is not responding to peoples requests for items of their loans, are charging fees such as coorporate, forberance and whatever else they can charge and people are losing their homes because of it. When is our government (Bush and McClain) going to really help homeowners and not themselves. Lousy politicians have no clue on how extensive Litton Loan goes to get people’s homes. McClain, you stink like the rest of the republicans.