Everyone has heard of the mortgage crisis... houses everywhere are being foreclosed at an alarming rate... in fact, I even searched for solutions to the problem on my walk to work Friday AM. I decided today to see what the Presidential candidates plan to do about this situation:
What IS the problem? McCain had an AWESOME analysis here of what led us into this situation. I have not been able to find any type of plan in his speeches or his website, as to what he plans to do to FIX this situation. He sounds like a real douche-bag in that article, BTW, so here is a link to a video where he sounds nicer. The gist of what I heard him say was that at this point, he just wants the government to "stay out of it"...
Obama has a plan:
1. Crack down on fraudulent brokers and lenders - make sure homebuyers have honest and complete information about their mortgage options.
2. Give a tax credit to all middle-class homeowners.
3. Create a Universal Mortgage Credit: a 10 percent universal mortgage credit to provide homeowners who do not itemize tax relief. This credit will provide an average of $500 to 10 million homeowners, the majority of whom earn less than $50,000 per year.
4. Ensure More Accountability in the Subprime Mortgage Industry (I SOOOOO completely agree with that.... )
5. Mandate Accurate Loan Disclosure: Obama will create a Homeowner Obligation Made Explicit (HOME) score. The HOME score will allow individuals to easily compare various mortgage products and understand the full cost of the loan.
6. Create Fund to Help Homeowners Avoid Foreclosures: Obama will create a fund to help people refinance their mortgages and provide comprehensive supports to innocent homeowners. The fund will be partially paid for by Obama's increased penalties on lenders who act irresponsibly and commit fraud. (Comments from Jana: comprehensive support sounds VERY vague. Who will be eligible for help? What will they be helped with? To me that is one of the most important facets of the plan, and it is the least defined.)
7. Close Bankruptcy Loophole for Mortgage Companies: eliminate the provision that prevents bankruptcy courts from modifying an individual's mortgage payments.
You can hear Obama talk about the mortgage crisis here.
Hillary has a plan too:
"Now it’s time for lenders, homeowners and investors to come together to solve this crisis and stem the tide of foreclosures... Hillary is proposing a comprehensive work out - not a bail out - that would end the foreclosure crisis."
1. Allocating up to $5 billion in immediate assistance to help communities and distressed homeowners weather the foreclosure crisis, and called for $1 billion in emergency energy assistance for families facing skyrocketing heating bills this winter. (Ahhhh... warmth.)
2. FORECLOSURE MORATORIUM: Hillary will call for a moratorium on home foreclosures of at least 90 days so that a rate freeze can take effect and at-risk homeowners can get financial counseling to help them transition to affordable loans.
3. FREEZE ADJUSTABLE RATE LOANS: The rate freeze must last at least 5 years, or until subprime mortgages have been converted into affordable loans. A typical subprime adjustable rate loan is raising monthly payments by 30% to 40% for many families, causing a wave of housing defaults across the country.
4. REQUIRE ACCOUNTABILITY: Hillary will ask for regular status reports on the progress Wall Street is making in converting unworkable mortgages into loans families can afford.
Want to hear Clinton talk about this issue? A video is here.
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Wow, I'm amazed at how different the three candidates feel about this issue!!! McCain almost makes it sound like the mortgage crisis was caused by irresponsible morons buying houses... and I find that offensive. Obama wants to punish predatory lenders (GO OBAMA!) but isn't clear on the help he wants to give to their "prey". Hillary had an awesome plan for how to help the people and communities affected by this issue... but doesn't seem to have a plan for how to keep it from happening again.
I already voiced my opinion on the mortgage crisis here... now I want to hear YOUR view! Feel free to rant endlessly in my comments, and make sure to cast your vote on my new poll!
3 comments:
The mortgage crisis is a complex one and I agree with some of what each said. I think there is alot of truth to "moron's buying houses" thing in that people will buy more than they can afford, don't save, and don't live within their means. You see it played out again and again. On the other hand, there are definitely predatory lenders that should be held accountable, because we had our mortgage sold out from under us to some unknown company who demanded we get caught up on our two months behind, plus they wanted the entire escrow, a total of $3000. We couldn't deliver so our house was foreclosed. We tried to work out a deal with the company but they said all or nothing. We owned that house for nearly 10 years, sold it for nearly 10,000 more than what we paid, but because of the legal fees from the foreclosure, we walked away with $28.00. That SUCKED!!!
Times are hard, gas is expensive, cost of everything has gone crazy. I think if we can create more ways to be less dependent on oil from outside countries, it would help the economy in the long run and cost of goods would go way down.
But bottom line is people need to learn to live within their means, stop using credit cards to purchase stuff they don't need and to have a budget and an emergency fund. Until people learn to do that, it is only going to get worse than better.
I completely agree with Amy! The Cool Cousin! :-)
I would really hate to see the government try to take over for people's responsibility, 'cause the government tends to mess things up when we give them all the power to make our own decisions.
Great summary - you should be a policy wonk! you're being wasted where you are.
Anyways, I have to agree on this thing about rescuing people who bought something they couldn't afford. I have spent my whole life being responsible with my credit. I have bought smaller and less so that it's affordable and researched and understood every decision around housing purchases. I haven't had a car I paid more than $4K for in 25 years. The one I'm driving now I paid $1K cash for 6 years ago. (diesel's are the worlds best kept secret - they keep running and running). I'm against the wall street bail out and I'm against individual bailout for decisions that weren't thought through. Meanwhile, I can't sell my house because of the mess that's been made so my husband continues a 3 hour round trip (we decided on that together but after 15 years it's getting old for him ..but we didn't ask anyone to bail us out, we just wanted to put our house on the market and have it sold...ha! for probably 2 more years ha!) It is a complx issue. Rescuing people only makes them repeat their mistakes because it cost them nothing - in fact they gain! I had an adjustable rate mortgage on my last house and knew what it was tied to, when it changed, and how much difference that made - and mine was capped...these things are negotiable. I know this because I did the research.
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