HOLC or Home Owners Loan Corporation was an agency formed as a viable alternative to foreclosure.

The Home Owners Loan Corporation essentially bought mortgages from failed banks during the Great Depression of the 1930s and modified the loan terms to much more reachable ones. They offered easier refinance options to homeowners than the remaining banks, afraid to take on mortgages. It extended the loan repayment period and divided the single lump sum payments into much smaller installments.

Result? The Home Owners Loan Corporation assisted more than one million American families in repaying their mortgage debt and to avoid foreclosure.

Contact your representatives and legislators and ask them about reviving the Home Owners Loan Corporation.

It was there all along, waiting on the horizon years ago. I’m talking of course of the housing bust. I casually mentioned the artificially inflated housing problem to a group of friends in the Summer of 2005, and how the housing boom was going to adjust in the coming years and come back and haunt us. What I didn’t foresee was how hard and how far it was going to spread.

What I still see as a problem that no one is talking about is the 0% interest financing that has to come to an end. Automotive manufacturers make their dividends, the real bulk of any profits in the financing arm, not from the manufacturing. Auto makers have been giving away their product for years, all while biting their own tails.

Two, low and non-existent interest on passbook savings accounts does no one any good. Savings accounts should not be necessarily tied to the current federal lending rates. Savings accounts should be used to insulate both the banks and the consumers by encouraging healthy saving habits.

Three, spending the bulk of the stimulus monies on programs simply results in budget crises down the road. “Projects, have a begin and end date, programs usually don’t”. I guarantee that in 2-3 years we will be at one of those periods when the U.S. Senate can’t pass a budget because of party bickering and forces our government to a temporary standstill.