Have you heard about this yet?
CNBC Business News Analyst Rick Santelli blows up over President Barack Obama's plan to help Americans who can't pay their mortgage:
“The government is promoting bad behaviour! … How many of you people want to pay your neighbour's mortgage?”
and the next day, White House Press Secretary Robert Gibbs responds. Boy, does he respond:
Q On the foreclosure plan, aside from Rush Limbaugh and that cable rant on the floor of the Exchange, there really does appear to be some —
MR. GIBBS: Chuck's network? (Laughter.)
Q — there really does appear to be some anger out there from people who just don't believe the President when he said that only people who acted responsibly are going to be helped here. How can you assure people that you're going to reward only people, only homeowners who acted responsibly?
MR. GIBBS: Well, let's go through this, because I do think this is very important. And I've watched Mr. Santelli on cable the past 24 hours or so. I'm not entirely sure where Mr. Santelli lives, or in what house he lives, but the American people are struggling every day to meet their mortgage, stay in their job, pay their bills, to send their kids to school, and to hope that they don't get sick or that somebody they care for gets sick and sends them into bankruptcy.
I think we said a few months ago the adage that if it was good for a derivatives trader that it was good for Main Street. I think the verdict is in on that.
Here's what this plan will do: For the very first time, this plan helps those who have acted responsibly, played by the rules, and made their mortgage payments. This will help people who aren't in trouble yet keep from getting in trouble. You can't stay in this program unless you continue to make mortgage payments. That's important for Mr. Santelli and millions of Americans to understand.
Here's what this plan won't do: It won't help somebody trying to flip a house. It won't bail out an investor looking to make a quick buck. It won't help speculators that were betting on a risky market. And it is not going to help a lender who knowingly made a bad loan. And it is not going to help — as the President said in Phoenix, it is not going to help somebody who has long ago known they were in a house they couldn't afford. That's why the President was very clear in saying this was not going to stop every person's home from being foreclosed.
But Mr. Santelli has argued, I think quite wrongly, that this plan won't help everyone. This plan will help, by the money that's invested in Freddie and Fannie — will drive down mortgage rates for millions of Americans.
The President in his speech was very clear in saying that every American with a mortgage payment should call their lender and see if they can refinance right now. This plan helps people that have been playing by the rules but can't get refinancing, get that refinancing so their home doesn't become foreclosed on.
And Mr. Santelli might also know that if you live in a home that's near one that's been foreclosed, your home value has likely dropped about 9 percent, which for the average home is about $20,000.
Now, every day when I come out here, I spend a little time reading, studying on the issues, asking people who are smarter than I am questions about those issues. I would encourage him to read the President's plan and understand that it will help millions of people, many of whom he knows. I'd be more than happy to have him come here and read it. I'd be happy to buy him a cup of coffee — decaf. (Laughter.)
Chuck.
Q I want to sort of follow up on the criticism that —
MR. GIBBS: Let me do this, too. This is a copy of the President's home affordability plan. It's available on the White House web site, and I would encourage him: download it, hit print, and begin to read it.
Q The criticism that's coming on the housing plan is similar to the criticism that came on the bank bailout vote before you came into office and in Phase II, which is there are people who were irresponsible who will be helped — period. It's going — that is a fact, that is going to be — that is going to be — people are going to use that to say this is not fair. So what do you — how do you — you know, how do you justify that? I mean, how do you —
MR. GIBBS: Well, look, there is — there will be people that made bad decisions that, in some ways, will get help. This plan, though, I think it's important for the American people to understand, was designed to help those that have been responsible.
As the President has said, if your neighbor's house is on fire or if several houses are on fire, you don't debate it; you get a hose and try to put the fire out. That's what's most important. This plan will stop the spread of those foreclosures because it addresses those that are — that potentially could be in trouble but aren't there yet, get the help they need so that the foreclosure sign doesn't go up on their front yard.
But I also think it's tremendously important that for people who rant on cable television to be responsible and understand what it is they're talking about. I feel assured that Mr. Santelli doesn't know what he's talking about.
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