What is the Home Owners’ Loan Act?

The Home Owners’ Loan Act (HOLA) is a federal law that was passed in 1933 to help people struggling with mortgage payments during the Great Depression. The Act allowed the Federal Home Loan Banks to provide loan refinancing to potentially thousands of borrowers. It also helped to create the Federal Savings and Loan Insurance Corporation (FSLIC). The Home Owners’ Loan Act offered loan refinancing when the borrower couldn’t avoid foreclosure and the lender was unable to sell the property. Banks were authorized to give new loans to those facing such a situation, with a maximum of 50% of the current market value of the property. HOLA also provided federal insurance for savings and loan deposits, protecting them from loss in the event of a financial crisis. In California, the state’s Department for Business Oversight oversees state and federally chartered institutions, including banks and credit unions. It makes sure that the institutions comply with all state and federal laws, including the Home Owners’ Loan Act. California also has additional state laws, such as the Golden State’s Financial Privacy Act, which gives consumers the right to limit access to their personal information. The Department for Business Oversight also regulates mortgage lenders, who must comply with the California Home Loan Act. This law governs how these lenders assess and originate mortgage loans, and how they can provide loan refinancing plans.

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What is the Home Owners’ Loan Act?

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