Obama: McCain Mortgage Plan Ill-Advised

DAYTON, Ohio (AP) - Democrat Barack Obama told a campaign audience Thursday that Republican John McCain's mortgage buyout plan would cost taxpayers billions of dollars and reward bad behavior by lenders.

Speaking in Dayton as he started a two-day bus tour of hotly contested Ohio, Obama said McCain's plan would force the government to absorb the full cost of renegotiating mortgages to prevent borrowers from losing their homes. Lenders should share some of the costs, he said.

The Democratic presidential candidate's campaign also criticized McCain's mortgage plan in a new 30-second ad to air nationally on cable TV, a relatively inexpensive way of drawing media attention to an issue.

Obama told thousands at a baseball stadium that McCain's plan "would guarantee that American taxpayers lose by handing over $300 billion to underwrite the kind of greed and irresponsibility on Wall Street that got us into this mess."

McCain has said his plan would be expensive. But he says it is necessary to get thousands of bad mortgages off the books and to stop the fall in home values and credit availability.

Obama said the government should use some of the $700 billion in the newly enacted financial rescue plan to buy up troubled mortgages.

"But we need to do it in a responsible way," he said. The government should not overpay for the mortgages, he said, or reward "the very lenders whose recklessness helped cause this crisis."

Taxpayers should be assured "a share of the benefits when our housing market recovers," he said, and the government should crack down "predatory lenders."

Saying McCain has offered widely different economic proposals lately, Obama added, "I don't think we can afford that kind of erratic and uncertain leadership in these uncertain times." Some Republicans say the word "erratic" is meant to raise doubts about McCain's age, 72.

Obama's campaign criticized McCain's mortgage plan Wednesday, but Thursday marked the first time Obama addressed it himself.

A new Obama campaign TV ad says McCain "would shift the burden from lenders to taxpayers, guaranteeing a loss of taxpayer money" and rewarding lenders "that caused the crisis in the first place."