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Unless you’re one of our older readers, you probably don’t remember the Home Owners’ Loan Corp., which was set up during the Depression to rescue people from foreclosure. It refinanced something like one in five mortgages on urban private residences in the mid-1930s.
Homeowners got a stretched-out loan that they could afford. The original lenders got partial—not full—repayment. It stopped making loans in 1936 and was dissolved in 1951 at a small profit to the government (not sure how that supposed profit was calculated).
The Center for American Progress is proposing to bring back the agency. Here’s a piece from the online edition of The New Republic by Andrew Jakabovics, the Associate Director of the Economic Mobility Program at the Center for American Progress. someone from the center.
Here’s an article from the Center for American Progress website spelling out that idea along with a bunch of others for coping with the subprime crisis. Here’s a column on the idea by Tom Petruno of the Los Angeles Times. Here’s a Wikipedia article about the Home Owners’ Loan Corp., which says that it was “essentially a failure.”
Not vouching for any of these pieces—just putting some interesting thinking out there.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.