Obama says McCain mortgage plan would reward bad behavior of lenders

DAYTON, Ohio (AP) -- Barack Obama is campaigning in Ohio today, where he's going after John McCain's mortgage buyout plans.

The Democrat says the plan "punishes taxpayers, rewards banks, and won't solve" the housing crisis.

At Tuesday night's debate, McCain said he would use 300 billion dollars of the financial rescue package to buy mortgages rather than mortgage-backed securities. The idea would be to then renegotiate the mortgages on terms that allow stressed homeowners to stay in their homes.

But Obama says that would force the government to absorb the full cost of renegotiation and guarantee that taxpayers lose. Obama says the original lenders need to share some of the costs, otherwise the money would end up underwriting what he describes as "the kind of greed and irresponsibility on Wall Street" that created the financial crisis.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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