All Options on Table in Fight to Halt Foreclosure

Obama considering moratorium, gov't-sponsored refinancing
By Jim O'Neill,  Newser User
Posted Jan 26, 2009 8:54 AM CST
A foreclosure sign stands on top of a sale sign outside an existing home for sale in the west Denver suburb of Lakewood, Colo.   (AP Photo)
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(Newser) – The Obama administration is considering plans to stem the tide of foreclosures ranging from doubling the mortgage interest deduction to a six-month foreclosure moratorium to government-sponsored refinancing, reports the Los Angeles Times. But a strategy is still at least several weeks away and, regardless of what bandages are applied, “many people will lose their houses anyway,” one economist predicts.

How to solve the crisis—as well as who should bear the brunt of the cost—remains unclear. Key to any resolution: that irresponsible borrowers not reap windfalls. Obama economic adviser Lawrence Summers told Congress the administration will commit up to $100 billion to resolve the issue, but said not everyone will be helped. And imposing solutions on lenders could make their fragile situations even worse.