Joe Nocera had fascinating column in Saturday's New York Times about how FDIC Chairwoman Sheila Bair's idea about how to fix the mortgage mess and how the political system moved toward her idea.

But the most interesting part of the story may well be the last four paragraphs, when Nocera quotes several others about the opposition to the plan by homeowners who aren't in trouble and don't understand why those who made a bad choice should be rewarded with five more years at the low teaser rates while they have to continue to pay the much higher fixed rates.  Here's one of the key paragraphs:

There is also a surprising amount of opposition to even the limited plan put forth by Mr. Paulson.  I’ve been struck, for instance, by the groundswell of resentment from homeowners who did not speculate or get caught up in the housing bubble — and who now feel that people who acted irresponsibly are getting a break they don’t deserve.  The problem, however, is that Ms. Bair is right about the potential consequences of doing nothing at all.  “Sure there were people who made bad decisions,” said Desmond Lachman, a scholar at the American Enterprise Institute. “But if the alternative is that the economy will be crushed, I don’t see why the rest of us have to pay for that” just to make a point to those who overreached.

And then there are the real fire-breathers like Mr. Schiff, who think any government intervention is too much. “The people in those homes who can’t afford to pay the mortgage have no right to be in them,” he said sternly. “They have no means to pay for it. They don’t get squatters’ rights. If they’re foreclosed on, they won’t be homeless. There is an ample supply of rental properties.”

This is a critical aspect of the politics of the mortgage situation that has yet to be addressed adequately.  The Bush administration's plan, which is a variation on what Ms. Blair suggested, makes it appear as it some homeowners will actually do better than those who have fixed rate mortgages and have been paying more per month because of it.

Policymakers will have two choices. 

First, they can somehow compensate those opposed to the Bush/Blair fix so that they feel as if they are not being punished for being responsible.  But will be exceptionally expensive and will have to involve taxpayer money, so is unlikely.

Second, they can impose some pain on the homeowners who will be participating in the program so that it doesn’t appear they are getting not just a bailout but also a reward.  One idea would be to require all of those who participate to pay 25 percent of the profits from the sale of their homes to a fund that would then be used for some other housing-related purpose.

Expect ideas like this to emerge in the days ahead, especially if, as many now expect, the Paulson idea of a strictly private sector program is replaced with a government-run effort.