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Posted: April 10, 2008 5:17 PM
McCain Calls for Limited Intervention to Help Ailing Homeowners
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Sen. John McCain, the presumptive GOP presidential nominee, outlined his most specific plan to date on how to salvage the nation’s economy.

Speaking in Brooklyn, N.Y., to an audience of small business owners, McCain, who was introduced by New York City Mayor Michael Bloomberg, slightly loosened his hard line stance against government economic intervention. He called for a plan that combines aspects of government-financed mortgage-rescue programs proposed by the Office of Thrift Supervision, the Bush Administration, House Financial Services Chairman Barney Frank and Senate Banking Chairman Chris Dodd, CNN Money reported.

The “HOME Plan,” as the Arizona senator calls it, “is built on the reality that homeowners should have an equity capital stake in their home,” McCain said. “Homeowners would end up with a 30-year mortgage and an equity stake in their home. The new lender would receive a federal guarantee of the mortgage.”

Still, McCain warned against government rescue programs that are too lax, saying “tax breaks for builders, funds to purchase homes in foreclosure, and tax credits that are not targeted to where the need is greatest do not constitute the federal help that is warranted,” emphasizing, “it is not the responsibility of the American public to spare them from the consequences of their own bad judgment.”

The senator proposed both short- and medium-to-long term plans to revive the economy and called for “an immediate DOJ task force to aggressively investigate potential criminal wrongdoing in the mortgage lending and securitization industry.”

Both Republican and Democratic rivals have accused McCain of ignorance on the economy, and presidential contenders Sen. Barack Obama and Sen. Hillary Clinton were quick to criticize McCain’s remarks.

Obama agreed with Clinton that McCain’s proposal amounted to little more than “the George Bush solution of sitting by and hoping it passes,” CNN Money reported.