Home Owners Loan Corporation (HOLC) can stop foreclosure

Home Owners Loan Corporation (HOLC) is able to stop mortgage default and help homeowners to retain their homes. But what is HOLC and how can it help you to retain your house? Let us explore.

Home Owners Loan Corporation – what is it?

HOLC or Home Owners Loan Corporation was an agency that bought mortgages from failed banks during the Great Depression of 1930s and modified the loan terms to much easier ones. HOLC offered easier refinance options to homeowners. It extended the loan repayment period and divided the single lump sum payments to smaller installments. Thus, Home Owners Loan Corporation helped more than 1 million families in repaying their mortgage debt and avoid foreclosure.

Home Owners Loan Corporation and its significance in current economic crisis
According to an estimate there are more than 2 million homeowners carrying $3 trillion mortgage debt. Moreover, there are 3 million ARMs (Adjustable Rate Mortgages) that would be adjusted to higher interest rate during 2009 and 2010. Mortgage default and consequent foreclosure were the main reason behind current financial and economic crisis. Thus, more mortgage defaults would deepen ongoing economic crisis in the coming years.

So, what's the solution?
The only solution is to stop mortgage default and consequently foreclosure. This can be done if Home Owners Loan Corporation is reinstated until the crisis is over. Corporation then can buy mortgages from lenders and dole out refinance options to the distressed mortgage borrowers at easier terms so that they can repay the loan. This will help the average distressed Americans to keep their homes with themselves.