by Daniel Costello

I give Sen. John McCain props for coming out with a specific proposal to deal with the mortgage crisis, even if its political chances are iffy. Too bad it's not a better idea.

Early this week, McCain presented a plan to purchase defaulted mortgages directly. He is pitching it as a bailout for homeowners rather than Wall Street.

The devil's in the details. As Georgetown professor Adam Levitin says, the plan, which appears based on the Home Owners Loan Corporation of the 1930s, isn't likely to work because the vast majority of residential mortgages today are securitized.

That means the government would have to pay full value for the mortgages out of the securitization pools. Or, Levitin says, it looks like McCain may be suggesting the mortgage industry voluntarily support the plan. That seems like a tough call right now. Take a read.