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Is John McCain's New Mortgage "Plan" Illegal?

Keith reports on how John McCain is still searching for an economic message to grab on to. Come on, people...scurrilous and relentless smearing can

Keith reports on how John McCain is still searching for an economic message to grab on to. Come on, people...scurrilous and relentless smearing can only cut into Obama's lead in the polls so much.

"Since Senator McCain has become fond of posing everything he says in the form of a question: With the Dow already Dow 17% for the week so far, do you think, Senator McCain, that Americans give a crap about rehabilitated 60's radical William Ayers? With the Dow on track for it's biggest weekly percentage drop ever, do you believe, Senator McCain, that voters would be in favor of your self-named 'American Home Ownership Resurgence Plan' if they realize that it would resurge only the balance sheets of financial institutions, passing all their losses to American taxpayers?"

As if McCain's erratic flailing on the paramount issue of the election weren't enough, Marc Ambinder is reporting that McCain's new "plan" may actually be illegal under the terms of the bailout bill he "suspended" his campaign in order to pass. I kid you not.

Marc Ambinder:

Folks who are much more savvy on the specifics of the Troubled Asset Relief Program (TARP) wonder whether the government's $700 billion bailout/rescue program expressly prohibits what John McCain now says he wants to do -- and that is to have the government buy distressed mortgages at face value from banks and renegotiate their terms with homeowners.

They point me to Section 101e of the law, which requires the Secretary of the Treasury to "take such steps as may be necessary to prevent unjust enrichment of financial institutions participating in a program established under this section"

So if they buy it at face value, wouldn't they violate the law?

It's almost as if Obama doesn't even have to talk about the economy anymore. McCain is doing enough damage to himself.

UPDATE: (Nicole) The Public Campaign Action Fund has put together a report (.pdf) that shows that McCain's plan has his lobbyist buddies' fingers all over it. The WSJ said today that it would benefit lenders, including predatory ones. More from PCAF here.

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