To bail out or not to bail out?

Lots of strong reaction to my story about Gov. Patrick's state-sponsored bailout of deliquent borrowers of subprime mortgages.

"What a joke," one reader wrote me in an email. "Here's Massachusetts rushing in once again to bail out a bunch of people who should have known better."

Indeed, the Mortgage Bankers Association estimates more than half of subprime mortgages made in the second half of 2006 were to refinance existing loans, with the vast majority of them cash extractions. It isn't a stretch to imagine the new cars purchased with proceeds or credit card bills paid down.

The other strong view is from those arguing mortgage lenders shouldn't be bailed out either. They made these disastrous loans, so let them suffer the inevitable losses.

State bailouts underway nationwide -- Ohio has a similar program and other states are working on them -- "are done not for sound economic reasons," another reader emailed, and benefit "politically connected financiers, and keep the price of housing artificially inflated."

But only about 1,000 subprime borrowers in Massachusetts will actually qualify for a refinancing under the state's program -- hardly a dent in the problem.