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Last night was the final presidential debate. The subject: domestic policy. The tone: testy, testy, testy! For those of you that gave up after debate number two, too bad for you! This one was the best by far. And frankly, I think the winner was Bob Schieffer, proving once and for all that journalists are actually better at speaking to the issues than the American people. Power to the reporters. Anyway, this is a housing blog though, so let’s get to the good stuff.

You’d think “foreclosure” or “mortgage” would have been fine words for a debate drinking game in this third round focusing on the economy. Noooot entirely accurate. Looking at the transcript, I counted eight “mortgages,” and zero “foreclosures.”

The debate kicked off with both Barack Obama and John McCain bringing up the housing crisis.

Kudos to McCain, who was the first to speak:

I am convinced that, until we reverse this continued decline in home ownership and put a floor under it, and so that people have not only the hope and belief they can stay in their homes and realize the American dream, but that value will come up.

Now, we have allocated $750 billion. Let’s take 300 of that billion and go in and buy those home loan mortgages and negotiate with those people in their homes, 11 million homes or more, so that they can afford to pay the mortgage, stay in their home.

Now, I know the criticism of this.

Well, what about the citizen that stayed in their homes? That paid their mortgage payments? It doesn’t help that person in their home if the next door neighbor’s house is abandoned. And so we’ve got to reverse this. We ought to put the homeowners first. And I am disappointed that Secretary Paulson and others have not made that their first priority.

Here’s Obama’s follow-up:

Now Sen. McCain and I agree with your idea that we’ve got to help homeowners. That’s why we included in the financial package a proposal to get homeowners in a position where they can renegotiate their mortgages.

I disagree with Sen. McCain in how to do it, because the way Sen. McCain has designed his plan, it could be a giveaway to banks if we’re buying full price for mortgages that now are worth a lot less. And we don’t want to waste taxpayer money. And we’ve got to get the financial package working much quicker than it has been working.

Later, in response to Schieffer’s question about what programs would need to be cut to prevent widening the deficit, McCain again brought up how to deal with foreclosures:

I just want to get back to this home ownership. During the Depression era, we had a thing called the home ownership loan corporation.

And they went out and bought up these mortgages. And people were able to stay in their homes, and eventually the values of those homes went up, and they actually made money.

And, by the way, this was a proposal made by Sen. Clinton not too long ago.

Frankly, I’m surprised McCain doesn’t talk about foreclosures more, considering he’s from Arizona, a state famous for its myriad foreclosures. Also, until about 8:30 a.m. this morning, I was still trying to figure out if “Joe, the plumber” was a real person, or in fact, a composite of Joe Six Packs met on the campaign trail. Well, plumber Joe exists! And, here he is: