Home Owner's Loan Corporation

The Home Owner s Loan

What is the Home Owners Loan Corporation?

As part of President Roosevelt's New Deal legislation, Congress passed the Homeowners Loan Act of 1933, which in turn created the Home Owners Loan Corporation (HOLC). This federal agency's main task was to refinance home mortgages that were in default or at risk of foreclosure due to the 1929 crash and the collapse of the housing industry. The loans applied to homes that were non-farm residential properties, did not house more than four families, and were not worth more than $20, 000. In order to sell affordable loans to homeowners, the HOLC would buy old mortgages from banks with government bonds that were financed by the Treasury and capital markets. By the HOLC’s final year in 1936, it had provided just over a million new mortgages, had lent out approximately $350 billion ($750 billion today), and by 1934 about one in five mortgages in America were owned by the corporation.

What’s the significance?

Before the HOLC, most mortgage contracts lasted between three and five years and homeowners had high interest rates in addition to paying off the principal. However, HOLC’s implementation of the 15-year amortizing loan led to a new direction for mortgage finance, allowing homeowners to pay off their loans in monthly installments over many years with the principal reduced over time. This would eventually lead to the typical 25- or 30-year mortgage.

While some criticize the HOLC because 20 percent of those who took out loans defaulted, others argue that the agency, temporary and implemented immediately in a crisis, still relieved the suffering of homeowners and the market in a very depressed economy, in which the for-sale market was extremely weak. In addition, the HOLC worked vigorously with borrowers to slow the foreclosure process by carefully appraising and re-appraising properties. In the end, it even ended up turning a small profit, which amounted to a little more than the losses of foreclosures.

There are many progressives today who argue that we need an updated version of the HOLC in order to deal with the millions of foreclosures originating from the recent subprime mortgage crisis. Although the mortgage task force has been created along with the bank settlement, intended to help homeowners at risk of foreclosure and who are underwater on their mortgages, many worry that these actions won’t go far enough.


Some risk, but well worth it

2004-08-26 14:38:48 by chucie01

I do consider myself very fortunate. While the economy is going down, my income is going up, rich by no means but it's enough to buy a house, support 4 kids while wifey stays home. I used to work for a corporation but I never liked listening to boss so I kept my eyes open for any opportunities. One day it came. My best advice is keep your overhead as low as possible so that you're not working for free (paying rent, bills, etc.) One day in the Bay Area I saw a store-front for rent ($500.00/mo) I immediately contacted the owner and within 3 weeks my store was up. I told myself, how in the world can I not make $500

Another broker off to butt-college.....

2011-01-05 18:39:43 by WretchedRabbit

Wednesday, January 05, 2011
Mortgage Broker Convicted of Bank and Wire Fraud
Beniamin Lucian Lucescu, 41, Portland, Oregon, was convicted of the crimes of Bank Fraud and Wire Fraud following a three-day jury trial. Lucescu is scheduled to appear before U.S. District Judge Michael W. Mosman on February 11, 2011 for sentencing on these charges.
Lucescu is a licensed mortgage loan broker and owner of American Capital Mortgage Corporation, Gresham, Oregon. The federal indictment charged that Lucescu, acting as a residential mortgage loan broker, knowingly prepared, on behalf of one borrower, five residential loan applications related to three different...

"It is important that those in the mortgage....

2010-12-07 17:46:00 by WretchedRabbit

Monday, December 06, 2010
Broker Found Guilty of Bank and Wire Fraud
Beniamin Lucian Lucescu, 41, Portland, Oregon, was convicted of the crimes of bank fraud and wire fraud following a three-day jury trial. Lucescu is scheduled to appear before U.S. District Judge Michael W. Mosman on February 11, 2011, for sentencing on these charges.
Lucescu is a licensed mortgage loan broker and owner of American Capital Mortgage Corporation, located in Gresham, Oregon. The federal indictment charged that Lucescu, acting as a residential mortgage loan broker, knowingly prepared, on behalf of one borrower, five residential loan applications related to three different properties that falsified the borrower's financial qualifications

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Four at-home pregnancy tests displayed the identical results; the stakes had been too high for Haley Carter to let just one decide her future. The Neediest Cases For more than 100 years, The New York Times .. Her fear had been justified; Ms.

allphotosmaps 1939 photo H.O.L.C. Chairman testifies before House Banking and Currency Committee. Washington, D.C., April 26. John H. Famey, Chairman of the Home Owners Loan Corporation photographed this morning as he testified before the House Committee on banking and Vintage Black & White Photograph
Home (allphotosmaps)
  • Photograph Description: 1939 photo H.O.L.C. Chairman testifies before House Banking and Currency Committee. Washington, D.C., April 26. John H. Famey, Chairman of...
  • Size: Approximately 8x10 inches. (20.3cm x 25.4cm)
  • This Photograph is an Archival Quality Reproduction created directly from the original photograph, and processed using the highest industry standards in equipment...
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University of Michigan Library Federal relief for home owners
Book (University of Michigan Library)
BiblioGov Federal Home Loan Bank Board, Home Owners' Loan Corporation, and Federal Savings and Loan Corporation Annual Reports: Fifth Annual Report of the Federal Home Loan Bank Board, 1937
Book (BiblioGov)

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