Is John McCain's Homeowner Resurgence Plan legal?

Folks who are much more savvy on the specifics of the Troubled Asset Relief Program (TARP) wonder whether the government's $700 billion bailout/rescue program expressly prohibits what John McCain now says he wants to do  -- and that is to have the government buy distressed mortgages at face value from banks and renegotiate their terms with homeowners.

They point me to Section 101e of the law,  which requires the Secretary of the Treasury to "take such steps as may be necessary to prevent unjust enrichment of financial institutions participating in a program established under this section"

Here's the key part...

... "including by preventing the sale of a troubled asset to the Secretary at a higher price than what the seller paid to purchase the asset." Any loan that is not held by the originator, and the vast majority loans are not, would fall under this provision."

So -- if the bank gave you a 100 dollar loan.... and sold it for 80 bucks last year, and it's trading at 50 dollars now, the law prohibits the government from buying it at $100 -- face value -- because that would "unjustly enrich" the entity which purchased the mortgage from the bank.

Under TARP, the government wouldn't be able to buy it for more than $80... which isn't face value.

So if they buy it at face value, wouldn't they violate the law?

McCain himself, one week ago, praised TARP's taxpayer protection planks and his campaign has claimed credit for  pressuring Congress to add them in.

The McCain campaign did not respond to e-mails seeking comment.
It's important to note that the FIRST version of McCain's plan, the plan that was announced during Tuesday night's debate, did not include the provision requiring the government to purchase these assets at face value and specifically noted that banks would have to shoulder losses already incurred.

Tonight, in an interview with ABC News's Charlie Gibson, McCain  suggested that Congress might have to appropriate "new money" for the $300b or so the plan would cost. 

Douglas Holtz-Eakin, McCain's chief policy adviser, said that the money could come from a variety of sources, including  the Federal Housing Administration, although the Dodd/Frank law, which expanded the FHA's authority to renegotiate mortgages, doesn't give the government the right to do what McCain wants it to do either.