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Repairing a Mortgage Crisis: HOLC Lending and its Impact on Local Housing Markets


  • Courtemanche, Charles

    () (University of North Carolina at Greensboro, Department of Economics)

  • Snowden, Ken

    (University of North Carolina at Greensboro, Department of Economics)


The Home Owners’ Loan Corporation purchased more than a million delinquent mortgages from private lenders between 1933 and 1936 and refinanced the loans for the borrowers. Its primary goal was to break the cycle of foreclosure, forced property sales and decreases in home values that was affecting local housing markets throughout the nation. We find that HOLC loans were targeted at local (county-level) housing markets that had experienced severe distress and that the intervention increased 1940 median home values and homeownership rates, but not new home building.

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  • Courtemanche, Charles & Snowden, Ken, 2010. "Repairing a Mortgage Crisis: HOLC Lending and its Impact on Local Housing Markets," UNCG Economics Working Papers 10-1, University of North Carolina at Greensboro, Department of Economics.
  • Handle: RePEc:ris:uncgec:2010_001

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    References listed on IDEAS

    1. David C. Wheelock, 2008. "The federal response to home mortgage distress: lessons from the Great Depression," Review, Federal Reserve Bank of St. Louis, issue May, pages 133-148.
    2. O. Emre Ergungor, 2007. "On the resolution of financial crises: the Swedish experience," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Jun.
    3. Fishback, Price V. & Kantor, Shawn & Wallis, John Joseph, 2003. "Can the New Deal's three Rs be rehabilitated? A program-by-program, county-by-county analysis," Explorations in Economic History, Elsevier, vol. 40(3), pages 278-307, July.
    4. Kenneth A. Snowden, 2010. "The Anatomy of a Residential Mortgage Crisis: A Look Back to the 1930s," NBER Working Papers 16244, National Bureau of Economic Research, Inc.
    5. Snowden, Kenneth A, 1997. "Building and loan associations in the U.S., 1880-1893: the origins of localization in the residential mortgage market," Research in Economics, Elsevier, vol. 51(3), pages 227-250, September.
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    Cited by:

    1. Jonathan D. Rose, 2012. "The prolonged resolution of troubled real estate lenders during the 1930s," Finance and Economics Discussion Series 2012-31, Board of Governors of the Federal Reserve System (U.S.).
    2. Eugene N. White, 2014. "Lessons from the Great American Real Estate Boom and Bust of the 1920s," NBER Chapters,in: Housing and Mortgage Markets in Historical Perspective, pages 115-158 National Bureau of Economic Research, Inc.
    3. Agustín S. Bénétrix & Barry Eichengreen & Kevin H. O'Rourke, 2012. "How housing slumps end," Economic Policy, CEPR;CES;MSH, vol. 27(72), pages 647-692, October.
    4. Price V. Fishback & Alfonso Flores-Lagunes & William C. Horrace & Shawn Kantor & Jaret Treber, 2011. "The Influence of the Home Owners' Loan Corporation on Housing Markets During the 1930s," Review of Financial Studies, Society for Financial Studies, vol. 24(6), pages 1782-1813.
    5. Jonathan D. Rose, 2014. "The Prolonged Resolution of Troubled Real Estate Lenders during the 1930s," NBER Chapters,in: Housing and Mortgage Markets in Historical Perspective, pages 245-284 National Bureau of Economic Research, Inc.

    More about this item


    HOLC; Home Owners Loan Corporation;

    JEL classification:

    • N00 - Economic History - - General - - - General

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