Foreclosures

clipped from blogs.wsj.com Alan Blinder and Lawrence Summers both wrote about the problems the economy faces from foreclosures and the possible solutions Blinder looks at the possibility of reviving the New Deal-era Home Owners’ Loan Corporation. “The HOLC was established in June 1933 to help distressed families avert foreclosures by replacing mortgages that were in or near default with new ones that homeowners could afford. It did so by buying old mortgages from banks — most of which were delighted to trade them in for safe government bonds — and then issuing new loans to homeowners. in the Financial Times Summers proposes bankruptcy overhauls and more voluntary restructurings “Bankruptcy reform alone could, on some estimates, avert 500,000 foreclosures Proper support for voluntary restructurings involving interests in future appreciation should realize still greater benefits.”