Gamblin' Man: McCain Has No Plan for Florida's Mortgage Crisis

Despite Prime Opportunity, McCain Offers Same Failed Approach

For Immediate Release: March 25, 2008

TALLAHASSEE - For Republican John McCain, each new address is an opportunity to prove doubters wrong with a lesson in the value of experience.

On the same day one leading indicator showed home values dropping 11 percent in January compared to a year before, McCain today gave a speech addressing the housing crisis. This is of particular interest to Florida, where homes sales have been down 30% off last year and foreclosures are becoming more and more frequent.

But McCain once again failed to live up to even meager expectations, ignoring the complexities of the housing market and promising more of the same failed Bush Republican policies.

Growing more Bush-like by the day, McCain offered nothing new - and little in the way of substance, with media noting that "the Republican candidate is offering no new proposals to ease the economic woes the country is confronting... The speech does not offer concrete plans, like say, the freezing of mortgage rates or tax credits proposed by Democrats, or other measures under consideration." [New York Times Caucus blog, 3/25/08]

The housing meltdown has been especially harsh in Florida, where residents are clamoring for relief. South Florida's housing market tied for one of the two weakest in the nation in January and prices fell nearly 20 percent. [Miami Herald, 3/25/08] In the fourth quarter of 2007 alone, nearly 300,000 families in Florida were delinquent on their mortgages. [Joint Economic Committee Data, http://jec.senate.gov/Documents/Reports/030608 - MBA Q4 Release.pdf]

"Time and again John McCain shows that he doesn't care to understand the challenges facing Florida's families. On his signature issue, the Iraq War, McCain has appeared dangerously confused about a key fact of the situation there. On the issue he admitted he knows little about, the economy, today's speech does little to reassure Floridians who are carrying the burden of this Republican recession," Florida Democratic Party spokesman Alejandro Miyar said.

"Many Floridians can't afford to pay their mortgages and others are held hostage in homes with plummeting market values. But instead of offering plans to help or deal with the problem, John McCain is content to let people rot," Miyar said. "The fact is that McCain supports the same Bush economic policies that got us into this mess in the first place, from the huge tax cuts for the extremely wealthy to the reckless special interest handouts to the billions being spent in Iraq every month."

McCain even tried to minimize the crisis and blame it on Americans who "bought homes they couldn't afford" and seemed to not comprehend the magnitude of the problem, asking: "How could four million mortgages cause this much trouble for us all?"

Johnny-Come-Lately

McCain Downplays The Mortgage Crisis
McCain Shrugged Off Home Loan Mortgage Crisis As Unimportant To Voters. "Mr. McCain campaigned on Sunday morning in Tampa with Gov. Charlie Crist, who endorsed him on Saturday. Mr. McCain continued his focus on national security, touching only sparingly on the nation's economic jitters. ''Even if the economy is the, quote, No. 1 issue, the real issue will remain America's security,'' Mr. McCain said to reporters, according to The Associated Press. ''And if they choose to say, 'Look, I do not need this guy because he's not as good on home loan mortgages' or whatever it is, I understand about that, I will accept that verdict. I am running because of the transcendental challenge of the 21st century, which is radical Islamic extremism.''" [New York Times, 1/28/2008]

McCain Passed-Off Question On Sub-Prime Loans. "One of Mr. McCain's guests on the bus on Saturday was Carly Fiorina, the former chief executive of Hewlett-Packard who is supporting Mr. McCain. The senator turned to Ms. Fiorina at the town hall meeting in Warren to help him answer a question about why the sub-prime mortgage crisis seemed to catch the country by surprise. Ms. Fiorina took the microphone and said that ''many, many people'' did not see the mortgage crisis coming ''because we forgot about a fundamental principle of American capitalism,'' transparency. She also said banks had taken many of the transactions off their balance sheets. ''She's a lot smarter than I am,'' Mr. McCain said." [New York Times, 1/13/2008]

Meanwhile The Situation Continues To Get Worse For Millions Of Americans
WSJ: "Foreclosure Rate Outpaces Sales by Lenders." "Foreclosures are occurring at the highest rate in decades -- and as a result, lenders are acquiring homes faster than they can sell them off. Last year, sales of foreclosed homes rose just 4.4%, while the supply more than doubled, according to First American CoreLogic. As of the end of last year, about 2% of all home loans were in foreclosure, or double the average rate over the past 28 years. It is the highest foreclosure rate since the Mortgage Bankers Association, a trade group, began collecting data in 1979. Lenders describe the current situation as the worst since the Great Depression." [Wall Street Journal, 3/25/2008]

In 2007, More Than 2.2 Million Americans Were "In Some Stage Of Foreclosure." "The median price of existing homes fell more than six percent in 2007, and more than one percent of all American households, or about 2.2 million-nearly double the 2006 tally-were in some stage of foreclosure, according to Irvine, CA-based RealtyTrac. In some key electoral states, including Florida and Michigan, the foreclosure rate was about two percent, boosting the sense of urgency for a solution. With another 1.7 million ARMs poised to reset over the next two years, according to the Federal Deposit Insurance Corp., the pain could get worse. Even January's 125 basis points of rate cuts by the Federal Reserve haven't done much to ease voters' unease." [USBanker, 3/2008]

But, McCain Admits He Had No Viable Solution:
McCain: "I Don't Claim To Be Smart Enough" To Offer A Solution To The Mortgage Crisis. In a meeting with the editorial board of New Hampshire's Keene Sentinel, McCain responded to a question regarding the sub-prime mortgage loan crisis saying, "Obviously, the worse it gets, the more there is a role for government. But I can't come down yet and give ... a specific solution, because I don't claim to be smart enough." [American Banker, 3/11/2008; http://www.youtube.com/watch?v=GTmIJ5Aag2Q]

McCain: No Plan On Housing Crisis. In an interview on ABC's This Week, George Stephanopoulos: They have also said, both Sen. Obama and Sen. Clinton have said we need a government fund to provide -- to help borrowers who are facing foreclosure on their homes. Good idea? MCCAIN: I don't think so, yet. We have the FHA working. We have a number of institutions working with them." [ABC News, This Week, 2/17/2008]

American Banker: Unlike Democrats, McCain Lacks Specific Plan To Solve Mortgage Crisis. According to the American Banker, McCain has failed to offer a comprehensive plan to address the rising home foreclosures. "Both Democratic candidates have offered broad and detailed proposals to protect consumers strapped by mortgages and other credit products, and support creating a government fund to help rehabilitate mortgages nearing foreclosure. Sen. McCain has been more muted. Unlike either of his potential opponents, the Republican's Web site shows no mention of the mortgage crisis among his economic proposals... Sen. McCain has offered only one proposal related to the housing crisis, supporting the creation of a simplified, one-page mortgage disclosure form to help borrowers understand their loans." [American Banker, 3/11/2008]

McCain Would BLOCK Millions Of Homeowners From Receiving Crucial Financial Assistance
McCain Opposed Providing Government Funds To Millions Of Hard-Working Americans Facing Foreclosure In Order To Punish A Few Speculators Who Gamed The System. When asked if there is a need for a government fund to provide relief for homeowners facing foreclosure, McCain replied, "I don't think so yet. We have the FHA working. We have a number of institutions working with them. But I would be glad to do whatever is necessary to relieve the burden of people who are legitimate borrowers who see their home loan interest payments so high, mortgage payments, so high that they can't afford it anymore, but I don't want to reward people who engaged in speculation. And I certainly don't want to reward institutions that engaged in the practice of lending people that couldn't afford to pay that home." [ABC News, This Week, 2/17/2008]

McCain Opposed Broad Role For The Government In Assisting Lenders. "Sen. John McCain opposed any broad role for the government Tuesday in rescuing the lending industry. Lenders should work with troubled borrowers and "fully disclose their losses," but a government bailout is not the answer, the Arizona Republican and presidential candidate said in a press release. "While it is the government's role to help the honest, hard-working homeowner in this time of distress, it is not the government's role to bail out investors who should understand that markets are about both return and risk, or lending institutions who didn't do their job," Sen. McCain said." [American Banker, 3/12/2008]

And Finally: McCain Compared Current Crisis To Savings And Loan Crisis
Irony Alert: McCain Compares Mortgage Crisis To Savings & Loan Meltdown. "Mr. McCain, who is focusing in more detail on issues related to the economy in the windup to primary season, did not specify what further federal intervention might be necessary. But Mr. McCain, a Republican from Arizona, indicated that the government has a role in helping the truly needy, and he likened the current crisis to the savings-and-loan meltdown in the 1980s, which set off an extensive government bailout to soften its effect on the economy." [New York Times, 12/19/2007]