Foreclosure Plan Getting High Marks for Scope

By Cheyenne Hopkins and Emily Flitter


The Obama administration did not make the same mistake twice. A week after being hammered for offering a bank assistance plan that lacked details, the administration unveiled a sweeping and detailed plan Wednesday to prevent millions of foreclosures. It includes just about every suggested solution: loan guarantees, greater incentives to lenders and servicers, and expanded use of the government-sponsored enterprises. It even included a stick to go with the carrots: a bigger push for legislation to let judges rework mortgages in bankruptcy. “If this doesn’t work, nothing will,” said Karen Shaw Petrou, the managing director at Federal Financial Analytics Inc. “We’ve tried a lot of other half solutions that were quibbled and nibbled at … , and we’ve wasted a year and a half. This needed to be really big and far-reaching, and I think this plan is.”