When someone applies for a mortgage, there are two parties to the transaction. On one side of it is a teacher or a blogger or an electrician or a lawyer or a nurse or a guy who manages a Home Depot. On the side is a guy who, for a living, as a professional, works in the “deciding on what terms to offer people mortgages” business who works, for a living, at a financial services business.
Be sure to read Matt's entire post. The Rick Santelli revolt is based in such bullshit. The idea that home buyers were the principal bad actors in this crisis makes zero sense for the reason outlined above. If I go to buy a house, and the person who's lending me the money says I can afford it, and that even if it's tight, not to worry because, in his professional opinion, the home value will definitely go up, and I base my purchase on that professional advice, how is this my fault? The alternative is to have everyone major in economics before purchasing a house.
The answer, of course, is that the brokerage firms knew they were going to sell off the mortgages they signed, so the impetus to avoid unnecessary risk just wasn't there. To blame people who reasonably believed no one would lend them money if they couldn't afford it is designed to kick up enough dirt and sand so the real culprits can sneak away.
What Rick Santelli and the rest of the thieves who created this mess want is for you to subsidize them, their banks, their companies instead of the "loser mortgages." Watching that clip of him whipping up the Chicago Exchange traders was like watching Knute Rockne give Murder Inc. a pep talk. Just total garbage.
But maybe I'm just being mean, and what Rick Santelli needs is a good, long hug and pat on the back. Because who wouldn't want the Good WIll Hunting treatment:
(h/t Pete for the Matt Y link)