DES MOINES, Iowa (Reuters) - Americans criticized a White House plan to help troubled homeowners as both too little and too much on Thursday, split over whether borrowers and lenders should be rescued in a bid to avert a U.S. recession.

Advertisements aimed at prospective homeowners on street corner in Perris, California, May 2, 2007. Americans criticized a White House plan to help troubled homeowners as both too little and too much on Thursday, split over whether borrowers and lenders should be rescued in a bid to avert a U.S. recession. REUTERS/Mark Avery

“It’s not the government’s problem. People got into this with the help of the banks and they overbought, most likely, and now we’re seeing the bailout,” said Gene Kaberline, 57, a Republican who has just moved to Iowa from California.

But Democrat Sue Repplinger, 66, who worked years ago in the real estate industry but is now retired, said the plan unveiled by President George W. Bush came too late for many borrowers whose homes have already been foreclosed.

“Those who played by the rules who have already lost their homes, what about them?” asked Repplinger. “We need a broader package than this. This is affecting the entire economy.”

The government’s plan, worked out with private lenders, would allow some borrowers with interest rates that are slated to rise sharply in the coming months to either refinance the loan or have their current rate frozen for five years.

But because the program is designed to help only those whose mortgage rates are set to adjust after January 1 -- and will not be available to those who have already fallen behind on their payments -- some homeowners will be left out.

“I was expecting a broader outreach. Why can’t the plan extend out to people like me?” asked Maryanne Hernandez, who bought her home in southern California in 2003 with an adjustable rate, sub-prime mortgage.

Hernandez and her husband, who have two children, were left scrambling when their adjustable rate began rising in 2006, They are now four months behind in payments and their neighborhood is full of foreclosed homes.

“A lot of people will benefit from the plan but it won’t help everybody that needs help. It won’t help me,” she said.

FEELING MISLED

California single mother Maricela Vargas, 41, also won’t qualify. She is one of many borrowers who feel they were misled by lenders into signing unfair loans.

“There are a lot of women like me who trusted people to do this paperwork, people that seemed to be honest. They charged more than they should. It’s my fault, but it’s not all my fault,” said Vargas, who is $9,000 behind in payments.

“I’ve been making calls for months, I called here, I called there. No one knows how to help.”

The timing of Bush’s announcement, which comes less than a month before the midwestern state of Iowa kicks off voting for the November 2008 presidential election, was also criticized.

University of Maryland School of Business analyst Peter Morici said the aid program only delays inevitable pain.

“Freezing adjustable mortgages at teaser rates will only push the problem to the next president,” Morici said.

Supporters of the plan say that without help for troubled homeowners there will be a knock-on effect hitting every part of the economy, from consumer spending to job losses.

But others said the program goes too far, rewarding irresponsible borrowers and lenders who got greedy during the five-year housing boom that ended in 2005.

Phoenix dentist Lawrence Freedman, 45, had a mixed view of the package, which he said would only “support a system that clearly wasn’t working.”

“It will probably ease the carnage, but was it a smart move? Absolutely not. I think the chips should have been left to fall where they may.”

Kansas mother of three Becca Dopheide, was also skeptical, saying some borrowers deserved the help but others did not.

“People go into loans with variable interest rates and balloons and all that stuff ... but they don’t worry about it because they just want what they want,” said Dopheide, 39.

“That bothers me that they’re getting a bailout. It isn’t going to help enough people and isn’t going to help the right people.”