Illinois Senator and Democratic presidential candidate Barack Obama’s proposal to fix the housing market is a four-pronged plan to “protect homeownership and crack down on mortgage fraud,” according to his campaign Web site. He promises to create a 10 percent universal mortgage credit — an average of $500 for 10 million homeowners — to homeowners who don’t itemize their tax deductions. Obama’s campaign also promises to increase government action in preventing mortgage fraud, saying that he wants to “ensure more accountability in the subprime mortgage industry.” (That, of course, might require the existence of a subprime lending industry, which has largely imploded amid a burgeoning economic crisis.) Nonetheless, Obama seeks to establish what his campaign says would be the first federal definition of mortgage fraud, as part of his STOP FRAUD Act. The Democratic presidential hopeful also said he would look to allow so-called cram-downs of mortgage debt in personal bankruptcies, a hot-button issue that has long been pressed for by consumer advocates and largely opposed by the banking industry. “The subprime mortgage industry, which has engaged in dangerous and sometimes unscrupulous business practices, should not be shielded by outdated federal law,” the campaign’s Web site reads. Critics, however, say that while Obama’s plan is geared to prevent fraudulent loans in the future, it does not offer specific aid to homeowners already struggling with bad loans. “Obama continues to promise that everything will get better once he is president, but does not explain how his programs and governing philosophy will adjust to new economic realities,” the New York Times’ Patrick Healy wrote Wednesday. Obama’s campaign is releasing a new ad criticizing Republican presidential candidate John McCain’s plan to stabilize the mortgage industry, which he announced Tuesday in the second presidential debate. Although McCain’s plan essentially reiterated language in the current $700 billion rescue legislation, it addresses specific actions by the government to buy and rewrite bad mortgages to aid the struggling housing market, rather than the more general “encouragement” included in the Act itself. While largely panned since it was first introduced, a study by Rasmussen Reports found on Friday that 52 percent of voters supported McCain’s plan to bail out mortgage holders, with just 35 percent opposed to it. Interestingly, the study found stronger support for McCain’s proposal among Democrats than Republicans, as well. With contributions from Paul Jackson. Editor’s note: To contact the reporter on this story, email [email protected].