Backlash grows against the housing bailout
Many Americans want no part of a government-funded bailout for troubled mortgage borrowers.
Current Mortgage Rates |
| Type | Overall avgs |
|---|---|
 | |
| 30 yr fixed mtg | 6.41% |
| 15 yr fixed mtg | 5.97% |
| 30 yr fixed jumbo mtg | 7.59% |
| 5/1 ARM | 5.92% |
| 5/1 jumbo ARM | 6.40% |
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NEW YORK (CNNMoney.com) -- Why should American taxpayers have to pay to bailout reckless lenders and borrowers?
The website Angryrenter.com, launched just last week, has a vitiation demanding that Congress not pass any bailout programs that reward risky borrowing and lending. To wit: "Let the free market sort it out!"
The petition is gathering 40 to 50 signatures per hour, according to spokesman Adam Brandon, who adds that the site is already getting 15,000 visitors a day.
"There's a huge segment of the country saying, 'We don't want our money used for a bailout,'" said Brandon.
AngryRenter.com is backed by FreedomWorks, the conservative, free-market Washington-based lobbying group run by former House majority leader Dick Armey.
"A third of the American public rents," Brandon pointed out. "They're saying 'I've been saving for a mortgage for years. I could have jumped in on a subprime loan too. Now I'm going to have to pay for a government bailout."
Many CNNMoney.com readers agree, expressing outrage at the idea of seeing their taxes used to keep people in homes they never should have purchased.
"We are both working professionals who would have liked to buy," said Matthew Haas, a community development organizer who moved to Los Angeles with his wife in 2003. They opted not to pay bubble prices, and are still renting despite ample income.
"Now we have hit [the alternative minimum tax] and are finding out our tax dollars are going to bail out others." "Where is value, morally, as a country?" he said. "Is it taking taxpayer money and applying it to people who should never have bought, people who were flippers?"
Many people would prefer the government do nothing at all to prop up the housing market -- especially those hoping to buy in a more affordable market.
Patrick Killelea has been blogging about the housing bubble at Patrick.net for four years from San Francisco, where it takes a not-so-small fortune to buy.
"Bailouts reward bad behavior. I've been diligently saving, denying myself lots of things so I can afford to buy, yet the government is saying we have to keep all these people in their homes," said the Web site programmer and author. "Well, wait a minute! Why can't I spend more than I can afford and have the government bail me out."
StoptheHousingBailout.com is another newly minted site devoted to the bailout backlash. "I just got really angry," said blogger Morgan Ward Doran, an L.A.-based attorney who isn't professional involved with the housing industry. "Everyone I hear from is against the bailouts."
Doran argues that lenders, brokers and home builders all made huge profits by overbuilding houses pushing through poorly underwriten loans, and now they want taxpayers to cushion their fall.
Indeed, there is a provision in the Senate bailout bill that would give extensive tax breaks to home builders, which has some people especially incensed.
The Laborers International Union of North America calculated recently that many of the largest builders, such as Pulte homes (PHM, Fortune 500) and Lennar Corp. (LEN, Fortune 500), could receive many hundreds of millions of dollars in tax rebates.
"The government thinks it should help the people who cheated and robbed us," writes CNNMoney.com reader Jordan Fogal of Houston.
Most people who are against bailouts trust the market more than the government.
The fastest way to return to normalcy is to let the market work, according to Angryrenter.com's Adam Brandon. He acknowledges that the impact on some homeowners will be devastating, but that things will get even more painful if we don't let the free market work its magic.
"I feel terrible for people losing their homes," said Brandon, "but the sooner we let the market sort this out, the sooner we can get back to growth. When the government gets involved, it can delay the inevitable." 
