CNBC's Rick Santelli tells it like it is [re: Obama mortgage relief plan]
I think everyone believes that minimizing foreclosures would be a good idea. Previous efforts have been dismal failures and unfortunately, the Obama mortgage relief plan aimed at helping 9 million distressed homeowners is overly optimistic and not likely to help very much. As I wrote the other day about The Obama housing plan, my take on the potential success is "quite simply, slim and none and slim left town."
The government's solution has been to reward bad behavior at the expense of those who have played by the rules. The net result of that is that it simply encourages more of the same bad behavior and the belief that if you fail, you'll be bailed out.
Well, I've been busy for the past few days (of course, that's a good thing) and I almost missed CNBC's Rick Santelli's now famous rant expressing outrage over the notion that we will be paying our neighbor's mortgage, particularly if they bought more house than they can afford.
The video is almost 5 minutes and worth every second.
Many agree. Calculated Risk is most concerned with that aspect of the plan.
"I think part 2 does reward some borrowers who used excessive leverage, and the banks that irresponsibly loaned them money. It would have been nice to exclude all borrowers with stated income / Alt-A loans, and any loan were the original fully amortized payment was greater than 38% or so of gross income. Those buyers were speculating on appreciation."
Finally, WSJ reports on White House spokesman Robert Gibbs response to Santelli. (The many comments are both interesting and revealing). Read more.