If that idea sounded a little familiar, MarketWatch pointed out, that’s because the $700-billion rescue package already includes authority for the Treasury Dept. to do just that, if it chooses.

From MarketWatch:

“I know how to do that, my friends,” McCain said. “And it’s my proposal, it’s not Sen. Obama’s proposal, it’s not President Bush’s proposal.”

The problem, of course, is that it is President Bush’s proposal. At least, it’s Treasury Sec. Henry Paulson’s proposal. It’s the heart of the $700 billion plan.

According to Section 110 of the law, the government is going to buy up “troubled assets,” including residential mortgages, and then do everything it can to “minimize foreclosures” by modifying the terms of the loans by reducing interest rates, reducing the principal or “other similar modifications.”