A new survey conducted by Freedom Works, a grassroots advocacy group, found the majority of Americans are against a mortgage bailout for subprime borrowers. Of those surveyed, 62 percent believe borrowers and lenders should take responsibility for the bad loans without government intervention.

'The public does not support a bailout,' said Freedom Works Chief Economist Dr. Wayne Brough in an interview with CNBC. 'This is something that happened in the marketplace and the marketplace is the best place to solve this problem.'

Source: FreedomWorks

According to the survey, 90 percent say subprime mortgages are a serious crisis, but the majority of Americans believe a federal bailout will only perpetuate the problem and help lenders more than borrowers.

The preferred solution is to let borrowers work out their own problems and enact new regulations requiring lenders to verify a borrower's ability to pay back a loan. Of those surveyed, 87 percent favor verifying finances and income.

The Bailout Debate

Policymakers are debating what should and should not be done about the subprime mortgage crisis. Current initiatives include proposals directly funded by taxpayer dollars, such as an appropriations bill approved by the Senate that earmarks $100 million for homeowners in need of foreclosure counseling and a multi-million subprime bailout proposal by New York Governor Eliot Spitzer.

Plans that are not costing taxpayer dollars now but could in the future involve the FHA, Fannie Mae, and Freddie Mac--three organizations that have been rapidly refinancing subprime loans and transferring risk to taxpayers.

Many people understand the rationale behind the bailouts but disagree with any plans that use taxpayer dollars to solve the problem.

'The last thing government should do is put taxpayers on the hook for a bailout of borrowers and lenders,' said Pete Sepp, Vice President for Communications of the National Taxpayers Union (NTU). 'This would only encourage more bad behavior in the future.'

Sepp adds that it could very lead to 'huge liabilities for American taxpayers.'

Experts and organizations like NTU who are against the bailout say the best solution is to allow lenders and borrowers to work out the problems on their own--without government intervention.

'Borrowers would be helped the most by legislation that encourage them and encourage lenders to get back to the negotiating table to find a way out of this mess that they've both created for each other,' said Jacob Vigdor, Associate Professor of Public Policy and Economics at Duke University.