Did Sen. McCain Get Bad Advice on Foreclosures?

Sen. McCain made a proposal at the Town Hall Debate on how to deal with home foreclosures and said ';this my proposal, this is not Obama's proposal or President Bush's proposal!';


The benefit he wanted to give to homeowners requires an adjustment on the loan terms for a home but home loans are ';bundled'; together and each bundle is insured by the U.S. and each bundle is sold to buyers (mostly from foreign countries) who buy fractions of the bundle.


There is no way to unravel this and change the terms for each home buyer.


I read this in the Contra Costa Times newspaper, does the staff of Sen. McCain fail to read newspapers or was the Senator ';set up'; by one in his staff to look like he does not know what he is talking about.


I am talking about sabotage by a mole in his staff that is trying to undermine his campaign.


What do you think? Is this possible, likely, most unlikely or what?Did Sen. McCain Get Bad Advice on Foreclosures?
Most people still believe that one bank holds the mortgage. After all, one household is responsible for paying the mortgage, so one bank must be responsible for collecting the payment and foreclosing, if need be, right?





Of course, that's not how the system works anymore. Homeowners still send their mortgage payment to one place (instead of a fraction of the payment to hundreds of owners), since one company usually keeps the right to collect payments.





Most people just don't know that loans have been packaged, sliced, repackaged, resliced, and sold to foreign hedge funds, pension funds, and other investors. They just go about making their normal payment, thinking the bank they are sending money to actually owns their mortgage.





So McCsin was relying on the ignorance of the vast majority of American voters by putting forth a $300 billion proposal that would adjust mortgage balances and payment terms. It is difficult to lose an election by putting your faith entirely in the hostility of the people to hearing the truth. As long as the media does not mention the mortgage securities business over and over again, people will hold onto their old, outdated beliefs that their bank actually owns their mortgage.





It would be impossible to unravel the mortgage securities investments now. But now McCain seems to think that the government should buy these toxic securities, renegotiate the terms, package them, slice them, and sell them back to domestic and foreign investors, with all of us taking the losses on the loans.





Problem: mortgages were packaged and sliced up, with no one having a stake in the ultimate success or failure of the underlying loan.


McCain's solution: package and slice up these same mortgages, and resell them so that no one has a stake in their success or failure.





Makes sense.


ForeclosureFishDid Sen. McCain Get Bad Advice on Foreclosures?
You can change the terms of a mortgage. Yes they are sold, but what he is saying is that the US government would pay the difference between the original loan value and the renegotiated value.





It is a horrible idea.
he gets bad advice on just about everything.
What you imply may be possible, but surely the man should have used his own brain.