Article: The McCain campaign launched a salvo of new economic proposals, the most ambitious of which is a plan to buy distressed mortgages at face value.(The Week)(John McCain)(Brief article)

The McCain campaign launched a salvo of new economic proposals, the most ambitious of which is a plan to buy distressed mortgages at face value. The problem with this plan is that it cannot improve on current law without rewarding reckless lenders at an excessive cost to taxpayers. Under the Frank-Dodd housing bill that was signed into law last summer, lenders must agree to "take a haircut"--slang for writing down the value of a distressed asset--in order to qualify for federal mortgage insurance. The lender bears an initial loss but is protected if the ...

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