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Paul Kiesel
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Senator Barack Obama Discusses the Problems with Senator McCain's Mortgage Plan

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In Tampa, Florida yesterday, Senator Barack Obama addressed an estimated crowd of 10,000 supporters about his plans to revitalize a sagging economy. He illustrated his plan to fix the foreclosure crisis, which happened to be his strongest point and sharpest attack against the poorly structured McCain Mortgage Plan.

The foreclosure crisis still blankets many parts of the country (Florida, incidentally, along with California and Arizona, has consistently ranked in the top three states with the most foreclosures per month over the past year).

Here is an excerpt of Obama’s speech:

The rescue plan that passed Congress was a necessary first step to easing this credit crisis, but if we’re going to rebuild this economy from the bottom up, we need an immediate rescue plan for the middle-class — and that’s what I’ll offer as President of the United States.

Last week, I laid out a plan that will jumpstart job creation, provide relief to families, and rebuild our financial system. It’s a plan that will also help struggling homeowners stay in their homes — something that’s particularly important here in Florida, where foreclosures are up 30% over the last year. All across this state, there are families who’ve done everything right, but who are now facing foreclosure or seeing their home values decline because of bad decisions on Wall Street and in Washington.

The other week, Senator McCain came out with a proposal that he said would help ease the burden on homeowners by buying up bad mortgages at face value, even though they’re not worth that much anymore. But here’s the thing, Florida. His plan would amount to a $300 billion bailout for Wall Street banks. And guess what? It would all be paid for by you, the American taxpayer. That might sound like a good idea to the former bank lobbyists running my opponent’s campaign. But that’s not the change America needs.

Look, we must act quickly to end this housing crisis. That’s why last March, I was calling for us to help innocent home buyers. And that’s why I fought to make sure the recent rescue package gives Treasury the responsibility and authority to help homeowners avoid foreclosure. But we should not put your tax dollars at unnecessary risk. We should not let banks and lenders off the hook when it was their greed and irresponsibility that got us into this mess. We should not be bailing out Wall Street — we should be restoring opportunity on Main Street. And that’s what I’ll do when I’m President of the United States.

If the American people are going to put up $700 billion to rescue our financial institutions, we should make sure those institutions are doing their part for the American people. That’s why I’ve called for a three-month moratorium on foreclosures. If you are a bank or lender that is getting money from the rescue plan, and your customers are making a good-faith effort to make their mortgage payments and re- negotiate their mortgages, you will not be able to foreclose on their home for three months. Now, we’ve also put in place long-term measures to restore our credit markets and help families refinance their mortgages, but until those measures start working, we need to help homeowners stay in their homes, and that’s what this foreclosure freeze will do.

And while we’re at it, there’s another step we can take to help innocent homeowners that won’t cost taxpayers a dime. Right now, if you own only one home, you’re not allowed to write down your mortgage in bankruptcy court. But if you own more than one home — if you own, say, six or seven homes like my opponent — you are allowed to write down your mortgage. That might help Senator McCain sleep easier at night. But it isn’t right, and it will change when I’m President of the United States.