McCain Supports Mortgage Crisis Bailout

07 Oct McCain Supports Mortgage Crisis Bailout

In the Tuesday evening, October 7, 2008 presidential debate, Senator McCain announced his support for a federal program to help those facing foreclosure. He suggested that the government institute a program to help homeowners who have mortgages that exceed the value of their home.

Under such a program, the Federal Government will, apparently, buy the mortgage and reduce it to more accurately reflect the house’s actual worth. Thus a homeowner, whose home has decreased in value, wouldn’t have to pay the amount of the loan that is unsecured (not covered by the house’s value). Such a program would stop innumerable foreclosures. The exact details, however, are still somewhat vague, and like many government programs; the devil is in those details.

Senator Obama has long supported a program to allow bankruptcy judges to do much the same thing – adjust the amount of a mortgage that is treated as secured and therefore has to be paid.

So there might be some relief for homeowners no matter who wins the White house in November.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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