"The government said last night it would bring forward laws forcing lenders to offer alternative payment schemes before they were allowed to take back

Via Calculated Risk, this post from the Times:

"The government said last night it would bring forward laws forcing lenders to offer alternative payment schemes before they were allowed to take back possession of the property.

Northern Rock denied that it was overly aggressive. “Repossession proceedings are only launched as a last resort,” it said."

Why is this important? Because of this story in the NY Times:

"Whether it was a one-time exception or the first sign of a new pattern, Richard Portes of the Center for Economic Policy Research in London sees a fundamental strength reflected in the European strategy. While Congress and the White House were focused on simply buying up hundreds of billions in mortgage loans gone bad, leaders like Mr. Brown sought to fix a deeper, even more serious threat: a lack of faith in the banks themselves.

That was why their tactic — becoming the investor of last resort, and the guarantor of loans between banks — worked to stanch the panic that caused Wall Street to plunge roughly 20 percent in one week."

What's clear from this juxtaposition is that Britain has a far more stringent policy about foreclosures. In other words, their mess might not have been the same as our mess. It's a good point, and I certainly favored the Swedish Plan, but the problem of foreclosures is not solved in Britain by any means, just as here. Time will tell which approach would have been better.

A. Focus on Mortgages.

B. Focus on Liquidity.