McCain And Obama On The Mortgage Mess

CBS Evening News: Breaking Down Where The Candidates Stand On The Housing Crisis

(CBS)  To help you make an informed decision in the presidential election, CBS News is devoting a large part of our broadcasts until Nov. 4 to telling you where the candidates stand on major issues - from the war in Iraq to health insurance to education … and a lot more. Each piece will be an in-depth look at the issues facing the 44th president. In this installment, CBS News correspondent Ben Tracy reports on how the proposed policies of Barack Obama and John McCain to tackle how the mortgage crisis would affect you.

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The Issue

In the city built on taking risks, there are far too many signs of a housing market gone bust. Just ask Adriana Camejo and Deanne O'Rear.

"Yes I do need help...badly," Camejo said.

"I honestly never would have expected this," O'Rear said. "Never"

Both are about to lose their homes in middle-class neighborhoods in Las Vegas - one of the hardest-hit cities in the nation. In fact, one in every 35 households in the metro area recently received a foreclosure notice. That's nearly 22,000 homes.

Camejo bought her home two years ago as a place for her son, Joseph, to grow up. She applied for a no-money-down, sub-prime loan and said the lender told her she had a 6 percent interest rate. It turned out to be 11 percent.

"Do you feel like they took advantage of you?" Tracy asked.

"Oh yeah, definitely, because I didn't have any prior education to buying the house," Camejo said.

As the loan payments grew, Camejo worked in a casino kitchen until 3 a.m. to make extra money. But when her husband was laid off, they fell behind and are now facing foreclosure.

"What is it like every day to deal with this?" Tracy asked.

"Tough, because my son tells me every day that he doesn't want to lose the house that he loves this house and he doesn't want to move," Camejo said.

Across town, O'Rear's foreclosure notice was especially embarrassing, because she gives mortgage advice to home-buyers.

"Still to this day it's embarrassing," said O'Rear, who works as a mortgage consultant. "It's hard to believe I'm even talking to you right now."

When the housing market tanked, so did O'Rear's commissions as a mortgage consultant. She couldn't keep up with payments on the home she bought 10 years ago, so she declared bankruptcy and tried to work out a deal with her lender - but got the run-around.

"I know where to go, I know who to go to, I know all of the entities, and still could not get anything done," she said.

A record four million Americans are either behind on their mortgage payments or facing foreclosure. With home values dropping, many are wondering where the candidates stand on the housing crisis.

The Candidates

With the mortgage mess taking down some of the biggest names on Wall St., the candidates say help for homeowners is on the way.

Sens. John McCain and Barack Obama both support a new federal housing program, beginning in October, which could help as many as 400,000 families. It encourages lenders to swap their customers' risky home loans for new 30-year fixed-rate mortgages, backed by the government.

"This will not be a windfall for borrowers," Obama said on May 27. "They're going to have to share any capital gains as the housing market stabilizes and their property values start going up again."

And that's something else both candidates agree on: No help for spectators or risk takers.

On April 10, 2008, McCain said: "It is not the responsibility of the American public to spare them from the consequences of their own bad judgment."

Overall, McCain favors less government intervention. He does support bolstering community groups that provide mortgage assistance. He also wants a specific government task force to investigate fraud in the mortgage-lending industry.

"If there were individuals or firms that defrauded innocent homeowners ... they must answer for their conduct in a court of law," McCain said.

While McCain supports the recent government takeover of mortgage giants Fannie Mae and Freddie Mac, he says he wants to downsize and eventually privatize them.

He's called for: "More oversight, more transparency, more of everything. And frankly, a dramatic reduction in what they do."

Obama also supports the bailout and calls for more regulation.

"If you expect the federal government to step in and to provide support if something goes wrong, then you're going to have to follow by our rules," he said on Sept. 8.

The rest of Obama's at least $10 billion housing plan calls for a larger government role than McCain's. He wants low-income homeowners to get a 10 percent mortgage tax credit, new criminal penalties for those convicted of fraud, a mortgage-rating system to educate homebuyers about their mortgage options and the creation of a foreclosure-prevention fund.

"If the government can bail out investment banks on Wall Street, then we can extend a hand to folks who are struggling on Main Street," he said on May 27.

Obama also wants to change bankruptcy laws to allow judges to modify a homeowner's mortgage payments.

The Impact

Obama's plan may have helped Deanne O'Rear. She declared Chapter 13 bankruptcy, but soon found out it wouldn't save her house.

"How big of a difference would it make for you if the bankruptcy courts could help refinance the terms of your mortgage?" Tracy asked.

"It would make all the difference in the world," O'Rear said.

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Ben Tracy gives some background for this story at Couric & Co.
Learn more about the "ground zero" of the mortgage mess.

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Adriana Camejo would likely qualify for the new federal program supported by both candidates - converting her high interest and risky adjustable-rate mortgage into a stable 30-year loan.

"What would you think about a plan like that?" Tracy said.

Camejo said: "That would be great, as long as the payments don't go up. I think that would help."

Yet Camejo knows this is not just a government problem - she says homebuyers need to do their homework.

"Get informed first. And make sure that you read everything that you're going to sign," Camejo said.

Because you don’t have to live in Vegas to know that owning a home these days is no longer a sure bet.

[kbmock2008]

I heard a guy on the radio Friday that makes so much sense.. using common sense on the USA economy.. it goes right along with Whoopie Goldberg from The View''s comments. Why doesn''t the government give the people money to pay off their mortgage, pay off their cars, pay off their credit cards.. putting someone in charge somehow.. let the economy turn itself around.. morgages would be paid.. auto dealers would be delighted and keep workers working.. credit cards would be in tact for americans and keep americans working .. there has to be a way. I''d love to be part of this. Please take this under advisement.. not give money to big corporations and CEO''s etc. If you know of the person to pass this idea too.. please do. Thank you in advance. Kathy

[praiseallah1]

Federal Elections Commission investigating Barak Obamas Campaign fundraising while the FBI investigates ACORN executives with Federal Racketeering Charges of voter fraud.

It has been well known recently that ACORN is at the heart of one of the most massive voter fraud campaigns in American history.

In recent years, many ACORN employees were convicted of voter fraud in Ohio, Colorado, California, Missouri, Washington, and other cities which easily manipulates opinion polls..

Obama campaign%u2019s federal filings showed ACORN%u2019s subsidiary, Citizens Services, only did polling and advance work on campaign events. Later, the campaign had to amend its reports to show that ACORN did GOTV work for them as well and paid them $800,000:

http://www.pittsburghlive.com/x/pittsburghtrib/opinion/archive/s_584829.html

"ACORN settled the largest case of voter fraud in the history of Washington State. Seven ACORN workers had submitted nearly 2,000 bogus voter registration forms. Three ACORN election fraudsters pleaded guilty in October. "

It`s obvious the Federal government needs to open up an investigation of ACORN and Obama under the RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS LAW.

Email the FEC at [e-mail], and the www.fbi.gov to demand that they stop this voter fraud.

[ragnar30066]

Now this mortgage crisis is one issue, and maybe the only one, on which Obama should be able to bring true expertise to bear. You see, two of his top economic advisors are the former CEO''s of Fannie Mae and Freddie Mac. If anyone is sent to prison from those two government agencies to join Ken Lay and Bernie Ebbers, it will probably be Obama''s guys.

That''s too bad, because they also understand politics, "Chicago style". His guys have used their influence well, and made sure his palm got crossed with money. Although he has only spent 143 days in the Senate, he has the second highest total of campaign contributions from those government agencies.

What are government agencies doing making campaign contributions? And leaving the bill for the taxpayer to pay when they go bust due to corruption and incompetence? McCain and Palin will change that.

Obama just wants to chang who sleeps at the White House. And who is #1 in campaign contributions from government agencies.

[luvienne]

KEATING 5

[dj292009]

VAWATCHING,
This is true. This person faught for our country and while these two candidates are out spending money this man needs his money to support himself and his family.

VAWATCHING I salute you sir and I feel for you. I hope you get what is justly yours. No matter who wins the elections those benifits are right fully and justifiably yours.

[vawatching]

As a veteran who has been waiting on my disability pay for an operation back in December of 2007. I have to ask how can we come with 85 billion overnight to save a failing private business. But we seem not to able to get a veteran his disability pay going on 9 months now that the VA has been processing my claim.

This goes to show how out of touch are government actually is.

Lets ask both the canidates this question

"How much was your last months utilities bill"

It''s my guess neither one would be able to answer that simple question

We can bailout private enterprise but we can not process a veterans claim under 9 months

Our Leaders as they call themselves are nothing but children stealing money from their mom and dad(THE TAXPAYER) to go out and play.

We need more than reform we need to get rid of both parties and take back our goverment before it is too late.

stop using tv, radio or print for political ads and force them to hit the street and ask for votes that is the only way to make elections fair for each canidate and would keep the money from lobbyists out of the process. Today you can not run for office unless you have millions of dollars. Would that money be spent better maybe providing health insurance or free college.

[jean243]

Is McCain suffering from memory problems? McCain pushed through the 1999 bill that de-regulated the financial services industry! (with Phil Gramm, his economic advisor.)

[kwvaughn1]

"I%u2019ll DEBATE ANYBODY ON WHY GEORGE W. BUSH SHOULD BE PRESIDENT ANOTHER 8 YEARS."

Posted by twalk1122 at 02:42 PM : Sep 17, 2008

OK, let''s go, twalk1122.... I''ll start. The constitution limits the presidency to two terms. Well, guess that about wraps it up. Oh yeah....and Bush sucks as a president.

[standlee5]

I honestly never would have expected this," O''Rear said. "Never"


You have to wonder if we should educate through our public school system on the risks and rewards of free market capitalism. THere is ALWAYS risk. ALWAYS. Eliminate the risk and you eliminate the rewards.

[skyk239]

Asking us to trust McCAIN with our economy is like chickens trusting Colonal Sanders with their health care.

On second thought chickens are probably safer with Colonal Sanders than we are with McCAIN/PALEN.

Posted by indevoter at 02:59 PM : Sep 17, 200

Thanks for the laugh! LOL Man I needed that! LOL

[skyk239]

Now people IF we can just get these people on Wall Street to NOT be greedy (we can trust them on this), we can stick with Trickle Down and run the debt up another 10 TRILLION or so.. no big deal!! LOL How stupid do you have to be to buy THAT LINE??

[ioweign]

What''''s the difference between Carly Fiorina and Phil Gramm?

Phil Gramm attacked Americans, and despite a public rebuke, remains close to the candidate and the campaign.

Carly Fiorina attacked John McCain, and has now been quietly banished from the campaign by a furious John McCain.

Moral of the story: McCain First.

[juremadeer]

KATIE, please ask Palin how she can demand BOTH "complete overhaul" of "regulatory system," AND
"...get government out of private sector progress." That''s the contradictory blather she emitted yesterday. If not "government," WHO regulates the lending/mortgage/insurance industries?

[david1737]

McCain quote:


"I don%u2019t understand how the economy works, I%u2019ve got to get a V.P. that will show me how it works."

Palin, McCain''s V.P. choice, simply doesn''t fill the hole in McCain''s admitted economic "bucket".

[david1737]

Hate say I told you so.

This is the death of the Republicans policy of deregulation.

It''s too bad that it has taken such an economic bloodbath to finally collapse the Repubs "house of cards."

All the best to everybody as we weather the storm.

[jayfl11]

Bailing out is not the same as regulating. What got us into this mess was regulations such as the "Community Reinvestment Act" which fairly much legally blackmailed financial institutions to make substandard loans. Fannie Mae and Freddie Mac ran amok while under the "control" of congress. In 2005 a bill to put them under the control of a separate government entity, because they were reckless in their policies and practices and posing a threat to the economy, was quashed by some very powerful Congessmen and Senators. It isn''t so much whether there is regulation that ensures safe practices, it is the type of regulation.

[whitemale08]

NOW JOHN MCCAIN AND SARAH PALIN WANTS US TO SUBSIDIZE THE FAILURES OF THE LAST 8 YEARS OF REPUBLICAN PHILOSOPHY?

HOW DARE THEY???? HOW DARE THEY???

[DCropp]

Gotta love McCain.

He has fought tooth and nail to deregulate the financial market. Yesterday, he says the government must stop bailing out these companies. Today, he says the bailout of AIG is the right thing to do.

McCain''s record speaks for itself. Look at his deregulation legislation. He has championed this his entire political career. Suddenly, in September 2008, he claims he''s fought against this his entire life.

Someone get a Bible and force McCain and Palin to take an oath. Maybe then they will start telling the truth.

[DCropp]

Gotta love McCain.

He has fought tooth and nail to deregulate the financial market. Yesterday, he says the government must stop bailing out these companies. Today, he says the bailout of AIG is the right thing to do.

McCain''s record speaks for itself. Look at his deregulation legislation. He has championed this his entire political career. Suddenly, in September 2008, he claims he''s fought against this his entire life.

Someone get a Bible and force McCain and Palin to take an oath. Maybe then they will start telling the truth.

[usamohammed]

John McCain will just continue the destructive ways of Bush. This is Americas chance to be welcomed back into the international community if they choose Barrack Obama as their leader. If Americans are dumb enough to vote for Bush then America will be shunned by many nations. Vote for Change Vote for Obama