Republican presidential candidate John McCain told CNBC that the government's top priority in the financial crisis should be on buying bad mortgages to keep Americans in their homes.
"The administration is not doing what I think they should do, and that's go in and buy out these bad mortgages, give people mortgages they can afford, stabilize home values and start them back up again," McCain said in a live interview with his vice presidential running mate, Sarah Palin.
"I'm disappointed that (Treasury Secretary Henry) Paulson has not put first emphasis on buying these home mortgages and keeping people in their homes," McCain added.
“That doesn’t begin to work,” counters Josh Rosner, Graham Fisher Managing Director. “We still have affordability issues and overleveraged borrowers and even if you refinance them, if home prices fall they’re quickly going to be in negative equity.”
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In case you’re wondering Rosner also says, "the closest thing that I think will stabilize housing is the old 1930’s homeowners loan corporation. That’s when the borrower goes to the government and the government says what they’re willing to loan you and then you go to the lender and see if they’re willing to accept it."