While John McCain was in Washington trying to pull a bailout bill together, Senator Obama tried to take credit for the bill by saying, from the campaign trail, that he was involved and pushing hard for provisions that protected taxpayers that were not in the original bill. What are these provisions exactly? As usual Senator Obama did not give specifics.
One of these provisions might be the requirement that the government try to renogotiate bad mortgages and lower monthly payements for homeowners that are in trouble so that they can keep their homes. This sounds a lot like McCain’s HOME plan that is defined specifally in his JOBS FOR AMERICA plan on his website.
Under the HOME plan 200,000-400,000 people would be able to keep their homes by writing down and retiring the existing loan the borrower has and replace it with an FHA backed HOME loan from a lender. The plan also covers homeowners who are facing a reset or can prove that they will not be able to continue paying current rates in the future. By doing this the government ensures repayment of the loans and can recoup billions of dollars currently being loaned to agencies like Fannie and Freddie. In addition, McCain’s plan calls for more transparency and accountability for lenders, another provision of the bailout bill.
Senator Obama, on the other hand, in his PLAN FOR AMERICA, only provides a 10% mortgage credit to homeowners who DO NOT itemize. As long as you make less than $50,000 you will get back about $500 on your tax return. In his plan Obama also highlights his introduction of the STOP FRAUD Act in 2007, an act that never passed committee in a Democratic controlled Congress. In addition to these proposed reforms, Senator Obama wants to create a HOME score, create a fund to help “innocent” homeowners and restructure bankruptcy laws. In the instance of the HOME score, lenders would have to develop a score that borrowers would use to compare mortgages. Keep in mind no system currently exists and would have to be created in order for borrowers to be protected. In the case of the fund Obama wants to create, it would be PARTIALLY paid for by increased penalties on lenders who act irresponsibly. The penalties are defined in his STOP FRAUD Act, the one lying dead in committee. And do I really have to say how long it might take for Congress and Wall Street to restructure bankruptcy law?
Taking credit or taking action? You decide which is more imprtant.