Giving a peek at a broader economic plan, Sen. John McCain (web|news|bio) is calling for federal aid for well-meaning homeowners with what he called "burdensome mortgages." "There is nothing more important than keeping alive the American dream to own your home," the likely GOP presidential nominee said in remarks prepared for a roundtable discussion Thursday at Windows We Are Inc. in Brooklyn. "And priority No. 1 is to keep well-meaning, deserving home owners who are facing foreclosure in their homes," the Arizona senator said.

McCain on Thursday proposed a plan to offer deserving people the chance to trade a burdensome mortgage for a manageable loan reflecting the market value of their home.

McCain's plan would benefit the government and original lender by giving them certificates for part of the loan's original value. If the homeowner sold for more, he or she would benefit along with the government and the original lender.

"It is built on the reality that homeowners should have an equity capital stake in their home," he said. "Homeowners would end up with a 30-year mortgage and an equity stake in their home. The new lender would receive a federal guarantee of the mortgage.

"And the taxpayer gets a benefit if the sale value ever recovers," he said.

He plans to make a broader speech on the economy next week, but McCain's address Thursday was intended to deflect criticism he has not yet addressed the economic crisis with specific and immediate efforts to help homeowners. The Bush administration and both parties in Congress also are proposing varying degrees of federal help for burdened homeowners.

McCain opposes aggressive intervention by the government to solve the mortgage crisis and the market upheaval it spawned, saying he prefers only limited intervention and letting market forces play out.

In his new proposal, he says the home would have to be a primary residence and that the borrower would have to be able to afford a new mortgage.

McCain said lenders ultimately need to write off losses, restructure balance sheets and raise more capital.

Separately, McCain called on the Justice Department to set up a task force to investigate criminal wrongdoing in the mortgage lending and securities industry.

If there were individuals or firms that defrauded innocent homeowners or forged loan application documents, then the punishments of the market are not enough, and they must answer for their conduct in a court of law, McCain said.

And he called for people's payroll taxes to help build accounts against lost job earnings.

Written By LIBBY QUAID

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