Remember when we had a President who help the 1% during economic recession

Mortgage Loan Crisis: FDR’s answer would prove useful today

Once upon a time, there was a nation where, during an era of prosperity, large numbers of citizens used short-term, interest-only loans to purchase their homes. They apparently were unaware that once the good times ended, they would be saddled with unbearable debt. Which is exactly what happened in America roughly 75 years ago.


Roosevelt’s real goal was to create stability from both an economic and social perspective. With the HOLC and the Federal Housing Administration, his administration created the long-term loan, which soon evolved into the 30-year, fixed-rate mortgage. The local business community praised the program, which not only helped people keep their homes, but also provided employment for construction workers. From 1933 to 1936, more than 1 million people relied on HOLC loans. Close to 80 percent of the borrowers made good on their payments and kept their houses. When the HOLC shut down in 1951, it returned a slight profit to the government.

Many of the elements of the Home Owners Refinancing Act, which created the HOLC, would be useful today. Although foreclosure rates of the early 1930s still tower over today’s rates, foreclosures and defaults are advancing at a dangerous pace, as borrowers struggle to keep up with their adjustable-rate mortgages. “Our problems of today do not begin to approach those of 1933,” Kevin Pollock, a fellow at the conservative American Enterprise Institute, told Congress last year. “But I suggest that HOLC could be usefully studied by anybody thinking about this issue.”

http://www.tnj.com/archives/2008/march/mortgage-loan-crisis