McCain Mortgage Lending Policy

The John McCain Mortgage lending policy provides a solid fiscal record with many years of home financing bills.

John McCain Position on Predatory Mortgage Lending

The National Association for Business Economics recently declared the subprime foreclosure crisis as the greatest threat to the American economy. The scariest part is that hundreds of thousands of subprime loans are scheduled to re-set in the latter part of this year and into 2009, which means that the economic policies of the next president will have a profound impact on this serious housing problem.

How has John McCain responded?

John McCain didn’t take a very strong stance on predatory lending, raised home loan limitations, more lending restrictions, APR restrictions and changing disclosure laws. And his voting record shows that he didn’t vote on the housing stimulus package.

McCain introduced the "Urban Homestead Act" (S.485), which would publish a list of unoccupied multifamily housing projects, substandard housing projects, and other residential property owned by the federal government (HUD); and would transfer ownership to a requesting community development corporation, after HUD satisfies any related indebtedness.

In his remarks at a conference in Santa Ana, California on Tuesday, McCain rejected any broad policy response and actually staked out a far weaker role for the federal government in addressing the foreclosure crisis than even the Bush Administration has offered. Although he was quick to blame homeowners and "rampant speculation," there was scant recognition by McCain of exhaustively documented predatory lending practices or the scandalous oversight failures of federal regulators, legislators and a president who arguably encouraged abusive lending practices through his ownership society".

"Lenders ended up violating the basic, fundamental rule of banking: Don't lend people money that can't pay it back. Some Americans bought homes that they couldn't afford," the Arizona Republican said. "I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers."

Bank Bailout - John McCain is for the Fannie Mae and Freddie Mac Bailout

"Those institutions, Fannie and Freddie, have been responsible for millions of Americans to be able to own their own homes, and they will not fail, we will not allow them to fail," Mr. McCain said during a stop at the Senate Coney Island Restaurant here. "They are vital to Americans' ability to own their own homes. And we will do what's necessary to make sure that they continue that function."

Preventing Foreclosures (save people save their home)

(source: www.johnmccain.com)

John McCain's approach to helping sub-prime or other financially strapped mortgage borrowers:

No taxpayer money should bail out real estate speculators or financial market participants who failed to perform due diligence in assessing credit risks. Any assistance for borrowers should be focused solely on homeowners and any government assistance to the banking system should be based solely on preventing systemic risk.

Any policy of financial assistance should be accompanied by reforms that promote greater transparency and accountability to ensure we never face this problem again. John McCain has proposed a new "HOME Plan" to help to those hurt by the housing crisis. Under his HOME Plan, every deserving American family or homeowner will be afforded the opportunity to trade a burdensome mortgage for a manageable loan that reflects their home's market value.

Eligibility: Holders of a sub-prime mortgage taken after 2005 who live in their home (primary residence only); can prove creditworthiness at the time of the original loan; are either delinquent, in arrears on payments, facing a reset or otherwise demonstrate that they will be unable to continue to meet their mortgage obligations; and can meet the terms of a new 30 year fixed-rate mortgage on the existing home.

John McCain's HOME Plan Will Keep 200,000 To 400,000 Families From Losing Their Homes. "But at the same time, McCain is calling for aggressive federal action to help keep 200,000 to 400,000 families from losing their homes. That plan has many of the elements of a proposal by Rep. Barney Frank, D-Mass., and Sen. Chris Dodd, D-Conn., requiring participating lenders to forgive part of the loan principal and then write a new loan that would be backed by the federal government through the Federal Housing Administration." (Tom Raum, "Everyone's Invited: McCain Economic Plan Draws From Both Parties," Tucson Citizen, 4/17/08)

How It Works: Individuals pick up a form at any Post Office or download the form over the Internet and apply for a HOME loan. The FHA HOME Office certifies that the individual is qualified, and contacts the individual's mortgage servicer. The mortgage servicer writes down and retires the existing loan, which is replaced by an FHA guaranteed HOME loan from a lender.

John McCain will bolster groups like Neighborworks America that provide mortgage assistance to homeowners in their communities.