The Obama administration's wide-ranging foreclosure prevention and housing plan received the expected response on Capitol Hill on Wednesday, with Republicans wary of the scope of the proposal and Democrats heralding its ambition.

"President Obama's plan is bigger and bolder than most everyone thought, which is a refreshing change from the failed attempts of the last administration," said Sen. Charles Schumer, D-N.Y., in a statement.

The Obama plan, which was unveiled earlier Wednesday, marks the most expansive effort yet by the government to combat the record numbers of foreclosures that have weighed on the economy and are at the root of the credit crisis. The plan would set aside $75 billion as part of a series of proposals to help refinance some struggling borrowers, modify the loans of others, and use Fannie Mae (FNM) and Freddie Mac (FRE) to help the mortgage market.

House Speaker Nancy Pelosi, D-Calif., described the plan as a "comprehensive strategy to reduce record foreclosures and stop the nationwide plunge in home values."

"Addressing the foreclosure crisis is essential to get our economy moving again," Pelosi said in a statement released by her office.

Her GOP colleagues were less convinced, wary that the plan would benefit homeowners who made rash decisions or committed fraud to obtain their mortgage.

"I think that this plan will only delay inevitable future waves of the foreclosure crisis, rather than stem the tide," said Rep. Scott Garrett, R-N.J. He criticized the plan for not rewarding people who are successfully making their payments or chose to rent.

House Republican Leader John Boehner, R-Ohio, and GOP Whip Eric Cantor, R-Va., welcomed the plan's announcement by sending President Barack Obama a series of questions on it. These included how the administration will prevent homeowners who receive aid from eventually going back into default, and whether banks would be compensated for making loans that "they should have never made in the first place."

Obama was quick to address concerns that the plan could be exploited by homeowners who took risky bets on the housing market. In a speech in the Phoenix area, Obama said the proposal is focused on those who "played by the rules." People whose traditional mortgages are "underwater" will be eligible for refinanced loans, while people with subprime mortgages will be able to modify their loans.

"But I want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans," Obama said.

Still, the potential for fraud is a concern for some senators. Sen. Charles Grassley, R-Iowa, said Wednesday he sent a letter to Treasury Secretary Timothy Geithner last week raising the issue and requesting information from Treasury on the foreclosure prevention plan.

"Providing a benefit such as a federal loan modification program to those who committed fraud is bad policy and unfair to the honest borrowers who played by the rules," Grassley wrote in a Feb. 12 letter to Geithner.

Lawmaker opinion will be important as the Obama administration seeks to implement its housing plan, though few legislative measures will have to be enacted to put the proposal in place. House Financial Services Chairman Barney Frank, D-Mass., said the administration already has the ability to implement many of the provisions through the Wall Street rescue legislation passed in October. "This is precisely the decisive action we need, and the President is using the exact same authority Congress gave the Bush administration in the [rescue] legislation and the housing bill passed last summer to deal with the foreclosure crisis," Frank said in a statement.

The only major component of the Obama proposal that will require legislative action is banking-industry opposed changes to bankruptcy law, which would allow judges to rework the terms of mortgage loans on a primary residence. Democrats over the last year have repeatedly tried to enact such changes, only to be opposed by Republicans and aggressive lobbying by financial services firms.

Sen. Christopher Dodd, D-Conn., the chairman of the Senate Banking Committee, described the bankruptcy law reforms as an "important stick" to make sure lenders make a good-faith effort to work with borrowers. Boehner, however, questioned the need to allow judges to "cram down" mortgage loans.

"Should a responsible plan include a cramdown provision that could increase the monthly mortgage payments for responsible borrowers?" Boehner asked in a statement released by his office.

Pelosi said that lawmakers "stand ready" to act quickly on the bankruptcy law changes, as well as to make improvements to existing government housing programs to complement Obama's proposal.

In addition to the bankruptcy changes, it will take congressional action to make additional reforms to the Federal Housing Administration, according to a Treasury spokesman.

-By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com