The debate captures the strong emotions stirred up over who benefits as the government tries to fix the financial crisis. It's likely to remain on the front burner for months as lawmakers consider other contentious issues - like whether bankruptcy judges should be given the power to impose changes on borrowers' home loans.
"I feel like I'm doing the right thing paying my mortgage, and now apparently I have to pay my neighbor's mortgage, too. People are really angry," said Kim Guymon, a stay-at-home mom who bought a three-bedroom home with her husband in suburban Seattle in 2001 and has watched it drop $150,000 in value since last summer.
Rescuing people whose homes are worth less than they own on their mortgages doesn't sit well with Robert Bechler, either. Still, the 37-year-old flooring contractor said he sees little choice.
"If they don't bail those people out, it's just going to get worse. It's a necessary evil, I suppose," said Bechler, who with his fiancee just bought a house in Cape Coral, Fla. for $92,000 after waiting years for prices to fall.
The rescue plan unveiled Wednesday by President Barack Obama offers $75 billion in incentives for banks and investors to reduce struggling home borrowers' interest rates and make other changes to loan terms. The money will come from the second half the $700 billion federal financial bailout. The goal is to keep 4 million homeowners out of foreclosure and halt free-falling home prices.
To qualify, lenders and mortgage investors would have to agree on a lower interest rate that would be designed to reduce the borrower's mortgage payments to 38 percent of their pretax income.
The government would then provide financing to bring that ratio down to 31 percent.
Another piece is designed to help borrowers who are still making their payments on time, but want to refinance into lower mortgage rates.
Republican lawmakers and conservative pundits immediately denounced the plan as an affront to free market principles and said it promotes irresponsible borrowing.
Rep. Jeb Hensarling, a Texas Republican, summed up the plan as "Nice guys finish last." Conservative columnist David Brooks echoed those sentiments in a New York Times column titled "Money for Idiots."
Rick Santelli, a reporter for financial network CNBC, compared the government's actions to those of communist Cuba during a dramatic, televised rant Thursday from the floor of the Chicago Mercantile Exchange.
"The government is promoting bad behavior, America!" he said.
Video of the exchange has been viewed over 1.2 million times on CNBC.com, more than any other clip in the Web site's history.
Supporters of the plan are pushing back.
"This is the financial equivalent of what Hurricane Katrina did to New Orleans. Did they know they were living below sea level? Yes. Does that mean we shouldn't help them? That's ridiculous," said Kathleen Day of the nonprofit Center For Responsible Lending.
In an interview with The Associated Press, Obama's housing secretary, Shaun Donovan, said it's in everyone's interest to stop the wave of foreclosures, which drag down the prices of all homes in an affected area.
"What we're doing is we're benefiting everybody," he said.
Donovan said administration officials considered the potential backlash from angry borrowers when they designed the plan. That's why it doesn't just help borrowers in danger of losing their homes, he said. It also aims to make it easier for households who owe more on their mortgages than their homes are worth to refinance. There are nearly 14 million households in that situation, according to Moody's Economy.com.
In the coming months Congress is poised to try to hash out a set of housing issues, including whether the bankruptcy change is needed and a proposal to protect companies that collect mortgage payments from investor lawsuits.
The tussle over the housing bailout comes as the government is doling out hundreds of billions in bailouts and stimulus for banks, Detroit automakers and recession-weary consumers.
So why has the housing bailout wound up so many people?
Part of it has to do with the critical role housing plays in the national identity, said Barry Ritholtz, a financial analyst and author of "Bailout Nation, How Corrupt money Shook Wall Street."
"The average family doesn't have a huge stock portfolio. But you have 100 million families that own homes," Ritholtz said.
Rosa Valdez, a resident of Coachella, Calif., hopes it's not too late for her family to be helped. The native of Mexico saved enough to buy a new $380,000 home in 2006 in the Lennar development of La Morada, where foreclosures are rampant. She fears her home could be next without federal help.
"It's our last resource," said Valdez, who was turned down when she tried to renegotiate her loan.
O.B. Brock of Charleston, W. Va., opposes bailing out people who got in over their heads and the banks that helped them.
"It's just rewarding crooks," said the 38-year-old single mother, who said she turned down a bank's $100,000 mortgage offer five years ago because she knew she couldn't afford it.
Others are more sympathetic.
Debra Rodriguez, of Tucson, said she believes many borrowers were victimized by unscrupulous lenders.
"I could sit back and say 'Hey, I'm not getting anything and that's not fair.' But I've been fortunate enough that I don't need a bailout," Rodriguez said.
For Chris Grande of suburban Dayton, Ohio, helping troubled borrowers only makes sense after the billions spent on other bailouts.
"Does it reward bad behavior? Absolutely, it does. But no more than the banks who offered these loans rewarding themselves for their own bad behavior," said Grande, 26.
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