Foreclosures McCain Obama Clinton

Foreclosures McCain Obama Clinton

I read an article on CNNMoney.com entitled "Housing: Where the Candidates Stand" dated March 28th 2008. This article was very informative in showing how the presidential candidates stand on the housing crisis in America. I think by the time the election is over and the transition in the White House is complete most of the housing problems and foreclosures will be more than half way through the cycle. At that rate any legislation to stop foreclosures will be much too little too late. I'm not sure how fair it would be to bail out 2 million home owners when 2 million others lost their homes and are now renting with a short sale or foreclosure on their credit.

It might be a mute point where the candidates stand on the housing troubles but here they are and the responses are what is to be expected.

Republican John McCain's Response to how much the government should help:

"Government assistance to the banking system should be based solely on preventing systemic risk that would endanger the entire financial system and the economy," McCain said in a speech this week.

He called on lenders to do for borrowers what they are asking the government to do for them.

"They've been asking the government to help them out," McCain said. "I'm now calling upon them to help their customers, and their nation out. It's time to help American families."

Democrats Barack Obama's and Hillary Clinton's Response on how much the government should help:

Clinton and Obama have also both called for government money to provide housing aid.
Obama wants a $10 billion foreclosure prevention fund to help homeowners who are victims of mortgage fraud to help them sell their homes or modify their loans to help them avoid foreclosure and bankruptcy.

For her part, Clinton says the federal government should provide $30 billion to finance an Emergency Housing Fund to help local governments purchase and resell or rent foreclosed, vacant properties.

Unlike Obama, Clinton says lenders should implement a 90-day moratorium on foreclosures to allow borrowers time to work out modifications with loan servicers and freeze the interest rates on subprime adjustable rate mortgages for at least 5 years.

She has also said that if the FHA proposal to encourage lenders to modify mortgages doesn't alleviate pressure on the housing market, the government should be ready to do more.

"Given the severity of today's housing crisis, simply facilitating this auction process might not be enough to get our economy moving again," Clinton said in a speech earlier this week.

Her recommendation: the FHA or an entity like it should be ready to buy, restructure and resell mortgages in which borrowers now owe more on their homes than they're worth.

Such a program could be self-financing in the long run if the government buys the loans from lenders at a steep discount, restructures them to affordable levels for the borrowers and sells them back into the secondary market at a higher price.

Overall, the differences in the Democratic candidates' approach are a matter of degree.
"Clinton's proposals are more populist and more aggressive - Obama's don't go as far and aren't as detailed," said Brian Gardner, a political analyst with Keefe, Bruyette and Woods.

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