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Well Worth SavingHow the New Deal Safeguarded Home Ownership$
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Price V. Fishback, Jonathan Rose, and Kenneth Snowden

Print publication date: 2013

Print ISBN-13: 9780226082448

Published to Chicago Scholarship Online: May 2014

DOI: 10.7208/chicago/9780226082585.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 26 June 2022

The Borrowers’ Good Deal

The Borrowers’ Good Deal

(p.82) Chapter 8 The Borrowers’ Good Deal
Well Worth Saving

Price Fishback

Jonathan Rose

Kenneth Snowden

University of Chicago Press

This HOLC delivered relief to borrowers by lengthening loan durations, lowering interest rates, and by requiring no principal payments for the first three years. However, HOLC modifications did not generally grant significant reductions in borrowers’ total debts. The chapter uses an extended example, based on the case of HOLC borrower Joshua C. from Chapter 1, to demonstrate how loan payments on the HOLC contract compared to loan payments on other contracts typical of the 1920s and 1930s. Nevertheless, despite the HOLC’s relative generous loan terms, large portions of HOLC borrowers were delinquent in the late 1930s, in part due to the still-depressed economy. As a result, in 1939 the HOLC granted lower interest rates and the Mead-Berry Act allowed extensions on loan durations, therefore helping to limit the ultimate HOLC foreclosure rate to 19 percent.

Keywords:   Loan relief, Loan duration, Loan delinquency, Interest rates, Payments, Debt reduction, Refinancing, Extensions, Mead-Berry Act, Loan servicing

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