Election 2008: What Candidates Promise Homeowners
Now that their political conventions are behind us, it???s officially game on for the 2008 presidential candidates. Policy promises will be making headlines from now through November, and the candidate who brings theirs to the White House will have a direct impact on your home in terms of taxes, energy resources, and financial protections in an unsteady economy. In preparation for the new rounds of rhetoric, campaign ads and debates, here???s a quick rundown of what John McCain and Barack Obama offer for your personal home front.
Help For HomeownersBarack Obama: In order to prevent a repeat of our current mortgage crisis and provide relief, Obama???s plans include a crackdown on fraudulent brokers and lenders, ensuring that homebuyers have honest and complete information about their mortgage options, and a tax credit for all middle-class homeowners.
- Introduced over a year ago as comprehensive legislation to protect consumers against abusive lending practices and to combat mortgage fraud, Obama???s STOP FRAUD Act marks the first federal definition of mortgage fraud and creates new criminal penalties for mortgage professionals found guilty of fraud, increases funding for federal and state law enforcement programs, and requires industry insiders to report suspicious activity.
- Accurate loan disclosure will be mandated through creation of the Homeowner Obligation Made Explicit (HOME) score, providing borrowers with a simplified and standardized metric (similar to APR) for easy comparison of home mortgage products and clear understanding of a loan???s full cost.
- A current loophole preventing bankruptcy courts from modifying an individual???s mortgage payments will be closed.
- A 10 percent universal mortgage credit will be created to provide tax relief to homeowners who don???t itemize. The credit will provide an annual average of $500 in tax savings to 10 million homeowners, the majority of whom earn less than $50,000 per year,
John McCain:In order to keep well-meaning, deserving homeowners who are facing foreclosure in their homes, McCain???s HOME Plan includes financial assistance accompanied by reforms that promote greater transparency and accountability, and prevention against taxpayer money being used to bail out real estate speculators and financial market participants who have failed to perform due diligence in assessing credit risks.
- Deserving homeowners will be given the opportunity to trade a burdensome mortgage for a manageable loan reflecting their home???s market value. Those eligible are holders of sub-prime mortgages taken after 2005 for their primary residence, can prove creditworthiness at the time of the original loan, can demonstrate that they will be unable to continue to meet their original mortgage obligations, and can meet the terms of a new 30-year fixed-rate mortgage on the existing home.
- New loans would be backed by the Federal Housing Administration, which, after an individual???s application is submitted, would certify their qualification and contact the individual???s mortgage servicer for write-down and retirement of the existing loan.
- Groups like Neighborworks America that provide mortgage assistance to homeowners in their communities would also be bolstered.
Taxes and Tax Breaks
John McCain: With an eye toward encouraging entrepreneurship and small business in the U.S. economy, McCain plans to keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase out the Alternative Minimum Tax. In addition to tax rate reductions, deductions and credits for larger businesses, McCain will seek a permanent ban on Internet taxes and prohibit new cellular phone taxes.
Barack Obama: In addition to enacting a windfall profits tax providing a $1,000 emergency energy rebate to American families, Obama plans to cut income taxes by $1,000 for working families to offset the payroll tax they pay. Provisions for this include a "Making Work Pay" tax credit of up to $500 per person or $1,000 per working family; elimination of income taxes for seniors making less than $50,000; and simplifying tax filings for middle-class Americans.
Energy Sources and Going Green
Barack Obama: In addition to the windfall-profits-tax-based energy rebate mentioned above, Obama???s"New Energy for America" plan includes the following:
- Setting aggressive energy efficiency goals, and overhauling federal efficiency standards (including those affecting appliances and other consumer products).
- Establishing regulatory equity for utility companies based on improved efficiency, and investing in a smarter grid.
- Cracking down on excessive energy speculation that impacts consumer pricing.
- Ensuring that 10 percent of our electricity comes from renewable sources by 2012 and 25 percent by 2025.
- Weatherizing one million homes annually.
- Building more livable and sustainable communities.
- Developing and deploying clean coal technology.
- Providing safe and secure nuclear energy.
- Releasing oil from the U.S. Strategic Petroleum Reserve to cut prices, and swapping light and heavy crude.
- Promoting responsible domestic production of oil and natural gas.
- Implementing an economy-wide cap-and-trade system to reduce greenhouse gas emissions.
- Investing in a clean energy economy that provides renewable resources and promotes energy efficiency while creating five million new green jobs.
John McCain: While he does not support a windfall profits tax, McCain???s "Lexington Project" energy plan encompasses the following goals:
- Implementing a cap-and-trade system to set limits on gas emissions while encouraging the development of low-cost compliance options.
- Expanding domestic oil and natural gas exploration and production.
- Making electricity grid and metering improvements to save energy.
- Investing in clean, alternative sources of energy such as wind, hydro and solar power.
- Protecting the environment by addressing climate change.
- Promoting energy efficiency./li>
- Addressing the speculative pricing of oil.
- Committing $2 billion annually to advancing clean coal technologies.
- Construction of 45 new nuclear power plants by 2030 with the ultimate goal of eventually constructing 100 new plants.
Note: Tom Kraeutler is the Home Improvement Editor for AOL and host of The Money Pit, a nationally syndicated home improvement radio program. To find a local radio station, download the show???s podcast or sign-up for Tom???s free weeklye-newsletter, visit the program???s website. Tom's latest book, My Home, My Money Pit: Your Guide to Every Home Improvement Adventure, is available in bookstores everywhere and online.