Posts Tagged ‘Rick Santelli’

Renting from the bank

Via Felix Salmon, news that Sen. Chuck Schumer is signing on to a proposal to keep foreclosed borrowers in their homes as renters.

I love this idea in principle.  It renders literal the all-too-true idiom of overindebted homeowners: “They’re just renting from the bank.”

But in reality? The bill just intro’d in Congress, HR 6116, The Saving Families’ Homes Act, doesn’t come close to answering obvious questions. Who is going to be these now-tenants’ landlords – the mortgage servicers?? Good luck with that one.

And then are we to understand that the now-tenants are entitled to live in their homes indefinitely, for as long as they keep paying the rent? Why should former owners be entitled to a vital protection that most of the nation’s renters don’t have? This kind of unequal treatment is likely to lead to deep anger among many renters, who see homeowners who took excessive risks get benefits that those who prudently chose to rent — because they knew the numbers wouldn’t work — are denied. If you’ll recall, CNBC’s Rick Santelli tried to gin up a case for such resentments when the Obama administration announced its mild loan modification program. But here the sentiments would be real, and warranted.

Thursday, July 16th, 2009 | Tags: , , ,
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Growing rancor over homeowner bailout

Over at Politico, Andie Coller has a smart piece looking at the brewing resentments around the Obama homeowner bailout and the perhaps inevitable divisions between those getting financial help from the government and those who cannot. I’m quoted in the kicker.

Tuesday, February 24th, 2009 | Tags: , , ,
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Download it, hit print, and read it

…So Obama press secretary Robert Gibbs advised CNBC ranter Rick Santelli, who on the air last week attempted to stir a faux-populist rebellion by charging that the administration’s plan to help homeowners was a giveaway to reckless, imprudent and excessively aspirational mortgage borrowers. Okay, I don’t expect Santelli to ponder policy before he does an impersonation of Peter Finch in Network. But I’ve been struck by how inadequately people I talk to, or hear in the media, still understand an essential fact of the plan. (By “plan” I mean the part subsidizing loan modifications saving people from foreclosure, since even Santelli wouldn’t be fool enough to criticize the other part, which gives borrowers who took out low-risk mortgages using full documentation but had the misfortune to live in areas with sharp price drops the opportunity to refinance at lower rates.)

I’m going to resort to cheap boldface: The homeowners who get loan modifications are not getting a financial giveaway. Over the life of their loans, they will owe MORE than they did before the bailout. The government program to lower their monthly payments spends some bucks to keep them afloat over the next few years until the economy and home prices stabilize, making other options (like selling the home) possible. But because lenders will be adding all the unpaid principal and interest to the end of the loan the homeowner still pays the bill in the end. For most people, their loan balances will increase. Download, hit print, and read the Treasury Department’s own case studies for examples.

Saturday, February 21st, 2009 | Tags: , , ,
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