Obama wants the government to step in to help homeowners facing foreclosure. McCain has gradually broadened his position to support government intervention, but wants stricter requirements for borrowers seeking aid.
Obama’s plan to fight foreclosures:
Give homeowners the chance to have their loan modified, provided they meet certain criteria.
Offer of financial assistance to borrowers contingent upon lending reform.
Create a $10 billion foreclosure-prevention fund (part of a $30 billion stimulus package) to help at-risk homeowners in cities hardest hit by foreclosures. This would be paid for through penalties under the Stop Fraud Act and/or bonds.
Create 10% mortgage-interest credit for homeowners who don’t itemize their income-tax deductions. This would impact as many as 10 million, lower-income homeowners by giving them approximately $500 in additional tax savings a year.
Create rating systems for mortgage products and credit cards. The rating system would provide transparency to consumers regarding hidden costs, obligations, terms and interest rates,
Obama introduced the Stop Fraud Act a year ago but did not have much of a plan addressing the housing crisis until recently. While his plan has evolved over time, it is not well defined. For instance, he is not specific about how his $10 billion foreclosure-relief fund will be used. Critics argue it is a drop in the bucket anyway. Generally speaking, his proposals are aimed at creating a strong middle-class through tax credits and cuts, as well as creating more transparency in both the mortgage and credit-card industries.
Mccain’s plan to fight foreclosures.
“…Lenders and borrowers alike were caught up in the speculative frenzy that has harmed the housing market. And it is not the responsibility of the American public to spare them from the consequences of their own bad judgment.” — McCain*·
Provide more funding for community development groups so they can expand their home rescue efforts.
Backs Bush administration’s anti-foreclosure initiatives (Five-year, interest rate freeze on some types of sub-prime mortgages and voluntary agreement from six of the largest lenders to suspend foreclosures for 30 days so that homeowners can negotiate better loan terms).
Backs expansion of Federal Housing Administration (FHA) to help at-risk homeowners convert their sub-prime loans to conventional mortgages. He does not, however, support a reduction in down-payment requirements under the FHA.
BEST PRE FORECLOSURE FIGHT STATEMENT OF THE YEAR!
“…If the government can bail out investment banks on Wall Street, then we can extend a hand to folks who are struggling on Main Street.” — Obama**
Sources
CNNMoney.com
About.com
Barack Obama Website
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