· Give homeowners the chance to have their loan modified, provided they meet certain criteria.

· Offer of financial assistance to borrowers contingent upon lending reform.

· Provide more funding for community development groups so they can expand their home rescue efforts.

“…Lenders and borrowers alike were caught up in the speculative frenzy that has harmed the housing market. And it is not the responsibility of the American public to spare them from the consequences of their own bad judgment.” — McCain

· Allow troubled homeowners to refinance to a loan insured by the Federal Housing Administration.

· Allow subprime borrowers to challenge foreclosure proceedings if they’ve been subjected to abusive lending practices.

· Create a 10% tax credit for homeowners who do not itemize their taxes.

· Create a $10 billion fund to help victims of predatory loans.

· Create a separate $10 billion fund to help state and local governments maintain critical infrastructure.

· Authorize bankruptcy judges to reduce mortgage principal.

“…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.” — Obama

· Supports government aid to keep Fannie Mae and Freddie Mac from collapsing.

· Missed Senate vote on sweeping housing bill that gives Treasury temporary authority to give Fannie and Freddie an unlimited line of credit and buy stock in the firms if necessary.

“I think the actions taken by the Fed on Fannie and Freddie are correct…I hope that these measures will restore some of the necessary confidence in our institutions.” — McCain

· Supports maintaining the pivotal role that Fannie and Freddie play in providing capital to the housing market.

· Also missed Senate vote on the housing rescue bill, which President Bush signed into law on July 30.

“Senator Obama has long believed we should take all necessary steps to ensure affordable homeownership for millions of American families, and that includes an essential role for Fannie Mae and Freddie Mac.” — Obama Campaign Statement

· Create a Justice Department task force that punishes individuals or firms that defrauded innocent homeowners or forged loan application documents.

· Task force would also assist state attorneys general investigating abusive lending practices.

· Improve transparency in the lending process so that borrowers know exactly what they are agreeing to.

“Lenders who initiate loans should be held accountable for the quality and performance of those loans and strict standards should be required in the lending process.” — McCain

· Boost funding for law enforcement programs aimed at housing fraud by $40 million.

· Establish new federal criminal penalties for mortgage professionals found guilty of fraud.

· Require lending professionals to report suspicious or fraudulent activity.

· Establish a database of censured or debarred mortgage professionals, so borrowers can easily check the credentials of lenders.

· Establish a standardized estimate of the total annualized cost of a mortgage loan to make it easier for borrowers to compare different loans.

“We must establish stiff penalties to deter fraud and protect consumers against abusive lending practices.”– Obama

· Backed 2005 legislation that imposed new costs on those seeking bankruptcy protection.

The law, which Obama opposed, passed the Senate with Democratic support in 2005.

· Fast-track bankruptcy process for military families.

· Help seniors facing bankruptcy keep their home.

· Streamline bankruptcy process for families recovering from natural disaster.

· Amend bankruptcy laws to protect people trapped in predatory home loans.

“I fought against a bankruptcy reform bill in the Senate that did more to protect credit card companies and banks than to help working people. I’ll continue the fight for good bankruptcy laws as President.” — Obama