Recommended Reading

Alan Blinder is making a lot of sense in the Wall Street Journal today.

His first 3 points in the section on foreclosure mitigation are worth emphasizing.

First, significant principal reductions must be part of the solution, especially where mortgages are underwater. Relying on interest-rate reductions and stretching out payments isn't enough...
Second, the refinancing plan should not make missing several mortgage payments a prerequisite for assistance. We don't want to encourage more delinquencies.
Third, I have reluctantly concluded that Congress will have to realign some property rights to free mortgages from the legal straitjackets created by complex securitizations.

Also worth reading: Yves Smith rants about the plans for a new and improved TARP. I share many of his concerns. My feeling is that the Treasury is trying to be too clever here.