Rick Santelli's "Rant Heard 'Round The World"

"This is America.  How many of you people wanna pay for your neighbor's mortgage that has an extra bathroom and can't pay their bills?  raise your hand!"

This video went nuts on YouTube yesterday and with good reason.  The Homeowner Affordability and Stability Plan is just nuts on every level.

• The first and biggest misconception is that you have to be delinquent to benefit.  No, even if you are current on your mortgage, there is a provision to allow you to refinance to a lower rate even if your home value has decreased.  Sounds good on the surface.  Right?  Wrong!!  You are current on your mortgage.  You are a responsible person who's made good decisions and you don't need help.  But who in their right mind would not take advantage of this?  You're being forced as a responsible citizen to subsidize this program through higher taxes.  So, why not get your piece of the pie?  This is a complete waste of time and money.
• The second part of the program is aimed at the subprime market.  92% of us are paying our mortgages on time because we bought within our means.  We get nothing but the privilege of getting to keep our home.  Under this provision, the lender renegotiates the mortgage and gets $1,000 for every year that the borrower stays current.  The borrower receives incentives for every month that they stay current.  Draw your own conclusion here but a responsible lender or homeowner doesn't need to be rewarded.
  
• Part three is supposed to "keep rates low for new homeowners by restoring confidence in Fannie Mae and Freddie Mac".  Honestly, I have no idea what that means but, in context, I'd say it's an obscure waste of time and money.
• And the last part stipulates that bankruptcy judges can reduce the balance of your mortgage based on fair market value.  Who determines fair market value?  Is it the appraisers who contributed to this mess by "juicing" appraisals so that lenders could loan $150,000 on a house that could sell for maybe 80 grand on a perfect sunny day in June?  They could just do the reverse and say that your $150,000 home is only worth $80,000 and the $70,000 difference get distributed evenly to your neighbors.

You can verify everything I've said by checking this White House Fact Sheet

Dang!  I got a little long-winded.  Here's Rick's rant:

Rick said this morning that he wants "this discussion to get legs".  So share your thoughts here.