Mortgage Relief: A Better Approach [Harvard Business]

Back in February, the Obama Administration committed $75 billion to make mortgages more affordable to homeowners under financial pressure. Last week, however, the Congressional Oversight Panel for the financial bailout criticized the design of this mortgage modification program, and declared that “in the best case” it would prevent half as many foreclosures as the Administration predicted.

Pozen proposes a different kind of principal reduction program instead of the current mortgage modification program.