Tea Party on Foreclosure: "They Bought Houses They Couldn't Afford"

We already know some Tea Party members don't believe renters should vote.
But how do they feel about foreclosure? And, where does the Tea Party stand on the real estate crisis that has almost brought the American financial system to a standstill?

CNBC's Rick Santelli's now famous rant is credited with kick-started the Tea Party movement, even though Santelli has denied he is a part of the party and that his comment was anything other than spontaneous combustion (i.e., great TV).

Santelli yelled: "Why don't you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers' mortgages. Or would we like to at least buy cars and buy houses in foreclosure and give them to people that might have a chance to actually prosper down the road, and reward people that could carry the water instead of drink the water?"


But it turns out that kicking folks out of their homes is a core tenet of the Tea Party movement. In an exchange with Stephen Colbert, Freedomworks leader Brendan Steinhauser admitted that bailing out anybody, from banks to homeowners with bad mortgages is unfair. He also believes that most folks facing foreclosure bought homes they couldn't afford.

(What about folks who could afford their homes with the jobs they had at the time, only to lose them in the worst recession since the Great Depression?)

It looks like 2011 is going to be the worst year on record for foreclosures, according to Rick Sharga, of RealtyTrac (I'll post the latest numbers tomorrow).
TeaParty.org cares enough about foreclosures to run the press release on its website. With 5 million homeowners behind in their mortgage payments, foreclosures have hit just about every community in this country, with near-misses for millions more, including Tea Party candidate Christine O'Donnell.

More on MoneyWatch:

• Tea Party: Renters Shouldn't Vote
• Report Shows 2010 Was Record Year for Foreclosures
• Foreclosure Lawsuit Upset: Court Rules Against Wells Fargo and US Bancorp
• FHA's Reverse Mortgage Standards Get Tougher in Response to Increased Delinquency
• Pending Home Sales Up in November, Realtors Provide Economic Forecast for 2011
• Top Remodeling Trends for 2011
• Housing Prices Rebounding Here
• Tea Party: Don't Let Renters Vote
• Are You Getting Screwed by Your Lender?
• Help For Homeowners: 4 Million Homeowners Ask For Help
• Foreclosure Process Shows Mortgage Lending Isn't The Only Problem
• What Does Main Street Know That Wall Street Doesn't?
• Real Estate Crisis Continues - Non-Residential Construction to Fall 20% by End of 2010
• Jobs, Small Businesses, Payrolls, and the Economy
• Loan Modification Hell: New Solutions To Avoid Losing Your Home

Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.

[karewilleam]

Most people tend to take out a mortgage, then forget about it. The monthly payments go out from their accounts every month, but they probably couldn't tell you what the interest rate was if you asked! This is slack financial policy - it is easy to make sure you always have the best mortgage rate, and therefore pay the least interest. And believe me, over the years, even a fraction of a percent reduction in interest rates means big savings!

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[Chris_Hagerstown]

I seem to recall my realtor advised me to buy the most expensive house I could afford at the time. The rationale: given a rising market at the time a more expensive house would help my investment grow faster. I was advised to consider an interest only loan to maximize my leverage. I grew up with the understanding that housing should not consume more than 25% of my income, what was being suggested amounted to 42% of combined gross monthly incomes. I stuck with a home that only cost me 25% of my income alone and I am not underwater. Besides the sellers, who benefits from driving up home prices? Realtors.