McCain: I’ll buy your mortgage

McCain offered one of his most significant proposals of the campaign, saying he would order the Treasury secretary to immediately ‘buy up the bad home loan mortgages in America and renegotiate ... at the diminished value of those homes, and let people be able to make those ... payments and stay in their homes.’ McCain’s $300-billion plan, a turnabout from an earlier position, would require a radical shift in the government’s approach. It raised several questions the McCain campaign could not immediately answer, including what its potential impact would be on efforts to remedy the global credit crisis.

McCain’s campaign issued a 1½-page fact sheet to explain his call for the massive federal intervention, which it called the American Homeownership Resurgence Plan. The campaign noted that the $700-billion financial rescue package approved by Congress last week gives the Treasury Department authority to directly buy mortgages, but added, ‘It may be necessary for Congress to raise the overall borrowing limit.’ The Obama campaign, evidently wanting a piece of the idea, said Sen. Barack Obama had already suggested the Treasury use its new powers to buy individual mortgages.

Mr. McCain sought to break through by highlighting a proposal under which the Treasury Department would buy up mortgages that had gone bad, and in effect refinance them at prices homeowners could afford.