Mortgage bailout bid infuriates some renters

By Michael M. Phillips, The Wall Street Journal

Friday, May 16, 2008

AngryRenter.com looks a bit like a digital ransom note, with irregular fonts, exclamation points and big red arrows emphasizing renters' outrage over a proposed government bailout for irresponsible homeowners.

"It seems like America's renters may NEVER be able to afford a home," AngryRenter.com laments. The Web site urges like-minded tenants to let Congress feel their fury by signing an online petition.

"We are millions of renters standing up for our rights!" Angry they may be, but the people behind AngryRenter.com are not renters. Though it purports to be a spontaneous uprising, AngryRenter.com is actually a product of an inside-the-Beltway conservative advocacy organization led by Dick Armey, the former House majority leader, and publishing magnate Steve Forbes, a fellow Republican. It's a fake grass-roots effort - what politicos call an "Astroturf campaign" - that provides a window into the sleight-of-hand ways of Washington.

The housing crisis has sparked broad financial and economic distress. The House of Representatives responded last week by passing a bill that would provide up to $300 billion in federal insurance to help refinance troubled mortgages. President Bush has threatened to veto it, calling the measure a reward for speculators. On Thursday, key Senate Democrats and Republicans reached an agreement in principle on a compromise housing-rescue bill.

This week, officials from FreedomWorks, the organization behind the site, delivered to Senate leaders anti-bailout petitions signed by 44,500 people who clicked their agreement on AngryRenter.com.

AngryRenter.com does get to the center of the housing debate: Who deserves help and who pays for it? The average U.S. home price fell 12.5 percent between the second quarter of 2006 and the first quarter of 2008, according to Fiserv Inc.'s Case-Shiller Home Price Index and Moody's Economy.com. Prices are projected to fall another 12.5 percent by the second quarter of 2009, before they rise again, Economy.com forecasts.

As interest rates on some mortgages rise, many homeowners are unable to make their payments or refinance into cheaper loans. An estimated 2.5 million Americans are expected to lose their homes this year and next, more than twice the pace during normal times, according to Economy.com.

FreedomWorks officials say the current housing bill is just the beginning of what could be an onslaught of election-year bailout legislation. By providing relief to mortgage holders, the site argues, the government will prop up housing prices and reward people who borrowed more than they could afford to buy more house than they needed. That will continue to freeze out renters who were sidelined as home costs soared.

"We are the class that has been ignored in this debate," the site says.

FreedomWorks puts its copyright on AngryRenter.com and discloses on the back pages that it is the source of the effort. The site is nonetheless designed to look underdoggy and grass-rootsy, with a heavy dose of aw-shucks innocence.

• May 17, 2008

  3:17 a.m.

  Suggest removal

  happymike44 writes:

  I also don't like the thought of someone who went out and bought 5 homes getting bailed out.I have lived within my means for years now and it seems a littl unfair when people who went out and acted irresponsible get a hand at my exspense.They made their beds now lay in it.What is fair when some people were making hundreds of thousands of dollars.They were riding high and living the good life.Guess what time to pay the piper.I agree with the renters why should you get a bailout.I don't if I make a mistake why should you.I also had a landlord who took my money and raised my rate.Whenever he felt like it.So sorry to hear how some people are losing their homes.Why should I have to pay for it.

• May 17, 2008

  4:52 a.m.

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  roger44 writes:

  Taxpayers should not have to bail out these folks. I did the same thing with a vehicle, now I have to pay the piper and suffer the consequences. Called the bank before next payment due and said come get it. Cut the losses before paying a pile of interest. Maybe if I was a farmer.....

• May 17, 2008

  6:05 a.m.

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  wmurdo writes:

  "An estimated 2.5 million Americans are expected to lose their homes this year and next, more than twice the pace during normal times, according to Economy.com."

  So, on any given year prior to the housing "crisis", 1.25 million people have lost their houses.

  Hmmm....retroactive bailouts for those who couldn't wait for the crisis to hit?

• May 17, 2008

  7:38 a.m.

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  karma writes:

  Too bad the site isn't real. I'm an angry renter but I refuse to play party to political manipulation.

  As for the bill....RIDICULOUS! Way to show the younger generations how to act responsibly.
  Now I'm wishing I had given in to my wants rather than needs. Instead of acting the responsible renter and saving, waiting out the day where I could afford a reasonable home for myself and my son I should have just jumped into one of those monster houses and doggy-paddled until the government came to the rescue. Right? Is that how it's done these days? Now I'm stuck paying for someone else's home and dealing with my own rent going up.

• May 17, 2008

  7:55 a.m.

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  cobanobs writes:

  I agree with Karma, RIDICULOUS! My wife and I each worked 2 jobs to save for the downpayment on our home. We have a 15 year 4.75%fixed rate mortgage. Sure, we could have taken out an adjustable rate mortgage the brokers tried to sell us, but why? When rates are at an all time low why would you take out a mortgage with an interest rate that will mostly likely adjust up? No one held a gun to these peoples heads to take out adjustable/subprime mortgages. The question I have is what were they doing with the money they were "saving" while the rest of us were making our fixed rate payments. I guaranteee you they weren't paying down their mortgages or saving it use when the rates went up. Most likely they were spending it to enjoy a lifestyle that most of us dont have the luxury of. Now they are crying the blues and are all "victims." Those of us who are responsible and took out mortgages we could afford weren't asking the government to help s out when our neighbors payments wre half of what ours are. Let them reap what they sowed.

• May 17, 2008

  10 a.m.

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  gwats writes:

  This is such a hot-button issue that it probably won't happen until a new President is sworn in. I agree with most of posters here that a bailout should NEVER happen. I've been preaching to my other homeowner friends the virtues of the fixed-rate mortgage and modest living and my words have mostly fallen on deaf ears. Now these idiots are struggling with Adjustable Rate mortgages that are resetting and large SUVs they refuse to park drinking 3.75 per gallon unleaded. My family has two overseas vacations scheduled and my two small cars mean I never look @ the pump price.... I just buy it. Financial responsibility is beautiful thing although it's not as sexy as that new Sport-Utility on the dealer's lot down the street. I think I'll let him keep it.

• May 17, 2008

  10:07 a.m.

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  SASQUATCH writes:

  I can't make my credit card payments, my car is about to get repossed, I can't pay my education loans, I'm behind in my child support and alimony and I take my meds every other day.

  Who is bailing my ass?

• May 17, 2008

  10:49 a.m.

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  Heidi writes:

  I've lost thousands in the stock market, where is my bailout??

• May 17, 2008

  11:34 a.m.

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  tiero writes:

  Exactly Heidi

• May 17, 2008

  11:48 a.m.

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  tiero writes:

  Hide your assets, put your money in a coffee can in the back yard & take advantage of the mortgage crisis and bailout. I'm going to write a book

• May 17, 2008

  11:53 p.m.

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  nonayerbsns writes:

  Here I am, living below my means. Am I alone in this? Yes, I want a house. Yes, I'd love to get that 42 inch wide screen tv (not really, but let's pretend) but I can't. These people who, regardless of the 'predators' in the lending industry, have lived well above their means and are now going to get help for their ignorant, greedy and selfish desires. What a fool I feel.

• May 18, 2008

  6:58 p.m.

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  ColoradoExPat writes:

  The ironic thing about the the bailout, for all those crying about the poor people who are going to lose their homes, is that bailout really isn't for them. The banks and financial institutions who are holding all these bad notes have the most to gain. They stand to have to write off huge losses on these loans whether they foreclose and sell the house or agree to a short sale (take less than they are owed by the borrower so the borrower can sell the house). Worse still is that many of the foreclosures and short sales will continue anyway, and prices are not likely to go back up. The speculators who are in foreclosure are not going to start being able to pay and the bailout won't fix the difference between what they owe on the house and what it is worth, neither are the people whose income and assets where inflated on "liar loans" (stated income, stated assets or both), or falsified on regular loans. The prices will continue to be a problem because the supply, in this case the inventory of unsold new and pre-owned homes, is greater than the demand. So the bailout will help the banks out of some bad notes, it might fix a few ARMs and prevent some foreclosures for people in who have the resources to make payments on a lower fixed rate note, but it won't have near the impact most politicians believe it will. Those who own a home they never intended to keep won't be helped, those who purchased significantly above their means won't be helped, and the impact on prices will not come close to returning the market to pre-crisis levels. Its a feel good measure that does not accomplish much, except to help a few hundred thousand unwise borrowers out of a bad situation, at the expense of 100+ million responsible tax payers.