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Week of 6.27.08

The Candidates on Predatory Lending

Sen. Barack Obama and Sen. John McCain Where do Sen. Barack Obama and Sen. John McCain stand on the issue of predatory lending practices in the mortgage industry?

Barack Obama

  • Proposes $10 billion in aid to help prevent foreclosures.
  • Recommends amending bankruptcy laws to protect people who have predatory or misleading home loans.
  • Calls for increased penalties on lenders who break home-loan laws.
  • Supports legislation that would enable the federal government to insure billions of dollars in loans for at-risk borrowers in exchange for homeowners who owe more than their houses are worth.
  • Proposes a tax credit for struggling homeowners that would cover 10% of the interest on their mortgages annually.
  • Calls for increased regulation, including new authority for the Federal Reserve to regulate financial institutions.
  • Has called McCain "out of touch" with people struggling to keep their homes.
  • Has said: "Families should not be forced to stick to the terms of a home loan that was predatory and unfair. It's time to close a loophole that protects special interests while punishing working people."
» More from Barack Obama on Predatory Lending

John McCain

  • Calls for the creation of a Justice Department mortgage-abuse task force to investigate abusive lending practices.
  • Proposes a so-called HOME plan, which would allow homeowners who are behind on their home loans to apply to a Federal Housing Authority fund to replace their existing loans with government-backed ones.
  • Calls on mortgage lenders to "provide maximum support and help to their cash-strapped but creditworthy customers."
  • Generally opposes federal intervention but says the crisis may require measures to limit the fallout and to assist the truly needy.
  • Has said: "I will not play election year politics with the housing crisis. I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers."
» More from John McCain on the Housing Crisis