McCain's Plan for Mortgage Relief (insurance, loan, fixed rate, rate)

[drjones96]

"...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."

The above is a quote from CNN.

It'll probably never happen. It sounds good and all but I'm having a hard time seeing how they're going to finance it without either cutting back somewhere or raising taxes. And his overall stance is not raising taxes. By the time it would get passed (assuming it ever would) this whole deal may have turned the corner anyway.

[PotterGeek]

"...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."

The above is a quote from CNN.

It'll probably never happen. It sounds good and all but I'm having a hard time seeing how they're going to finance it without either cutting back somewhere or raising taxes. And his overall stance is not raising taxes. By the time it would get passed (assuming it ever would) this whole deal may have turned the corner anyway.

Too bad insurance companies don't offer "gap insurance" to cover loss of value of your home if you have to sell it at a loss. The homeowner can pay for it along with their homeowner's insurance...

Hey, now, there's an idea! Elect me for president! LOL

[ViewFromThePeak]

Originally Posted by drjones96

"...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."

The above is a quote from CNN.

It'll probably never happen. It sounds good and all but I'm having a hard time seeing how they're going to finance it without either cutting back somewhere or raising taxes. And his overall stance is not raising taxes. By the time it would get passed (assuming it ever would) this whole deal may have turned the corner anyway.

McCain likes zero Fed rates too. It's just socialism with some different color stripes.

Argentina anyone?

[HappyTexan]

Originally Posted by drjones96

"...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."

The above is a quote from CNN.

It'll probably never happen. It sounds good and all but I'm having a hard time seeing how they're going to finance it without either cutting back somewhere or raising taxes. And his overall stance is not raising taxes. By the time it would get passed (assuming it ever would) this whole deal may have turned the corner anyway.

One small hole there..so let's say that was me. I pay off the mortgage. Now a few years later I sell. How is the mortgage company and the government going to find me to get the $$ ? And that is assuming values go back up. What if they don't ?

[drjones96]

I think there are many holes in the quoted above. I mean in the near term you could do this deal while your home is experiencing a decline in value. But what happens 20 years later when your home has more than doubled in value and you sell it? Do you now owe the government all the money you made back? This plan could get very complicated very fast. It's trying to fix a near term problem in such a way that can have long term reprocussions.

[OCNYISHOME]

Originally Posted by HappyTexan

One small hole there..so let's say that was me. I pay off the mortgage. Now a few years later I sell. How is the mortgage company and the government going to find me to get the $$ ? And that is assuming values go back up. What if they don't ?

Easy enough.....they will put a lien on the property which will have to be cleared prior to transfer of title

[momof2dfw]

Originally Posted by OCNYISHOME

Easy enough.....they will put a lien on the property which will have to be cleared prior to transfer of title

That is what I was thinking. A lien is pretty easy to do and I'd bet they do that right off the bat. Or they could tack it onto the end of the note. If you stay past the 30 years once you finish paying off the "new original" mortgage you start paying off the "gov't loan".

[HappyTexan]

Yes, but the devil is in the details. We'll have to wait and see what they come up with to track this.