In his press briefing today, Press Secretary Robert Gibbs directly countered CNBC reporter Rick Santelli's criticisms that the President's housing plan would help irresponsible home buyers at the expense of others:
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.
...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.
...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.
In a guest post on the White House blog today, Housing and Urban Development Secretary Shaun Donovan explained:
Lots of people who played by the rules will be benefiting from this plan, in a couple different ways. Through refinancing and loan modifications with clear guidelines, along with new opportunities for people going through bankruptcy to get back on their feet, millions of people can get to a place where paying their mortgage every month is realistic again. A third part of the plan is $200 billion as a backstop to Freddie Mac and Fannie Mae, who issue more than 2/3 of the mortgages in this country, and those will go only go to people with good credit.
Now, as tragic as this has been, we believe that there are some who shouldn’t be helped in this plan. Some homeowners simply went well beyond their means, some bought additional property as a risky investment – these people will not be eligible for this plan.
Gibbs also added that "every American with a mortgage payment should call their lender and see if they can refinance right now."