SEARCH BLOG: GOVERNMENT and POLITICS
It seems as if every politician is on the "bailout" bandwagon. Now, Sen. McCain wants to get in the act:
The plan would retire old loans that homeowners no longer can pay and replace them with less expensive, 30-year, fixed-rate mortgages that are federally guaranteed. McCain said families would gain "the opportunity to trade a burdensome mortgage for a manageable loan that reflects the market value of their home."The statement is a little ambiguous, but I'll take it to mean that "when the borrower [aka homeowner] took out a subprime loan, the borrower was credit-worthy."
In line with his concern about bailing out speculators, McCain's proposal would apply only to homeowners who took out sub-prime mortgages after 2005 for homes that are their main residence. They would need to have proved they were credit-worthy at the time of the loan.
That begs the question, "What does credit-worthy mean if the loan was sub-prime."After all, if the taxpayers are guaranteeing a loan, shouldn't we want to know what the standard for credit really is?