Capital Markets

More on McCain $300 Billion Floor


John McCain had more to say about his mortgage plan in last night's debate:

I am convinced that, until we reverse this continued decline in home ownership and put a floor under it, and so that people have not only the hope and belief they can stay in their homes and realize the American dream, but that value will come up.

The first thing you should notice about that sentence is that it isn't, strictly speaking, a sentence. "Until we reverse this continued decline in home ownership," McCain presumably meant to say, some wonderful thing will never happen, or some terrible thing will continue to occur. But since he left the thought incomplete, we can fill in the blank however we like. Feel free to offer your suggestions. 

McCain also provided further evidence that his taxpayer-funded mortgage assistance would not necessarily be based on need:

Now, we have allocated $750 billion. Let's take 300 of that…and go in and buy those home loan mortgages and negotiate with those people in their homes, 11 million homes or more, so that they can afford to pay the mortgage, stay in their home.

It sounds like he's talking about people who are having trouble scraping together their mortgage payments. But as I noted in my column yesterday, the 11 million figure is his campaign's estimate of borrowers with negative equity (who may be perfectly capable of paying off their current loans), not borrowers who are about to lose their homes to foreclosure. Does McCain really think middle-class taxpayers should be forced to subsidize wealthy homeowners who bought mansions at inflated prices?