{
  "id": "RL34423",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL34423",
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  "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department",
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      "id": 416765,
      "date": "2009-02-25",
      "retrieved": "2016-04-07T02:43:14.402153",
      "title": "Government Interventions in Financial Markets: Economic and Historic Analysis of Subprime Mortgage Options",
      "summary": "This report summarizes and analyzes four previous government market interventions (Home Owners Loan Corporation in 1933, Continental Illinois in 1984, the savings and loan insurance fund shortfall in 1989, and the Latin American debt crisis in 1989), in light of current mortgage market conditions. Current proposals to help delinquent homeowners share many features in common with all of these actions.\nThe Home Owners Loan Corporation (HOLC) purchased delinquent mortgages at a discount and worked with homeowners to restructure the mortgages into more manageable terms. HOLC accepted slightly more than one million applications from homeowners to refinance their homes between June 1933 and June 1935. It rejected 488,000 applications, most for \u201cinadequate security\u201d and \u201clack of distress.\u201d HOLC foreclosed on 194,000 of those it was attempting to assist. At the time, many had serious concern that HOLC could be a costly undertaking, but when it disbanded in the early 1950s, HOLC returned a small profit to the government. HOLC successfully conceived and implemented new ways to contact delinquent homeowners and, in some cases, help homeowners find new jobs.\nIn 1984, Continental Illinois National Bank suffered a run after loans that it had not properly underwritten failed. The Federal Reserve and the Federal Deposit Insurance Corporation led intervention efforts. There were concerns that allowing the bank to fail could have serious repercussions throughout the financial system. This led to the FDIC Improvement Act of 1991.\nIn the 1980s, the Federal Savings and Loan Insurance Corporation approached insolvency because of the failure of member savings and loan institutions, also known as thrifts. Working together, Congress and the George H. W. Bush administration established the Resolution Trust Corporation (RTC), which was funded by the Resolution Funding Corporation (REFCORP). The thrift industry is still paying off the intervention operation, which is estimated to have cost $152.9 billion.\nIn 1989, Brady bonds helped less developed countries, mostly in Latin America, restructure their debt by renegotiating terms and writing down some of the loans. The plan, proposed by then-U.S. Treasury Secretary Nicholas F. Brady, overcame coordination problems in previous restructuring efforts. In addition to writing down some loans, the plan included some interest rate reductions, and having debtor nations post U.S. Treasury bonds as collateral with the Federal Reserve. Approximately $91.8 billion was refinanced under the plan. Repayment continues today.\nH.R. 1106 is among the bills before the 111th Congress that would intervene in economic (housing) markets.",
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc808403/",
      "id": "RL34423_2008Apr18",
      "date": "2008-04-18",
      "retrieved": "2016-03-19T13:57:26",
      "title": "Government Interventions in Financial Markets: Economic and Historic Analysis of Subprime Mortgage Options",
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc810591/",
      "id": "RL34423_2008Mar25",
      "date": "2008-03-25",
      "retrieved": "2016-03-19T13:57:26",
      "title": "Government Interventions in Financial Markets: Economic and Historic Analysis of Subprime Mortgage Options",
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      "type": "CRS Report",
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  "topics": [
    "Economic Policy"
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}