GOVERNMENT: Profitable HOLC

Most government excursions into the field of private enterprise have cost taxpayers money. So when the Home Owners Loan Corp. was created, Congressional sibyls prophesied that the Government would lose at least $1 billion. Last week HOLC's spry old board chairman, John Henry Fahey, produced figures to show how wrong they had been. When HOLC is finally liquidated in 1948, he said it will show a net profit of some $11,000,000.

Starting in 1933, when mortgages were being foreclosed at the rate of 1,000 a day, HOLC made more than 1,000,000 loans, totaling some $3,500,000,000. In the next three years (its lending period) it refinanced one-fifth of the nonfarm, owner-occupied, mortgaged homes in the nation. Thanks to the war boom, more than three fourths of the loans have now been paid off. By the end of 1945, only 483,000 borrowers were still on the books, while another 348,000 borrowers had paid their loans in full without waiting for them to mature. HOLC had foreclosed on less than 200,000 loans, most of them from 1937 to 1940. It has already sold all but 120 of the houses. Fahey says its net loss of $50,000,000 to the end of 1945 will be more than covered by HOLC's income from other loans.