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Foreclosures

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Foreclosure is the legal procedure that banks use to gain ago some of the money they loaned once a borrower can"t repay the loan. During the 30s, there were hundreds of foreclosures. Words "foreclosure" itself ended up being a rallying cry for political movements.

Here"s what regularly taken place. Throughout the 20s, many kind of farmers obtained money from financial institutions to buy more land also or brand-new machinery. Farmers pledged their assets as security on the loan. So if a farmer couldn"t make the payments on a loan for land, the financial institution can take back the ascollection – the land also – and market it to acquire earlier their money. In the 1920s, many type of loans were composed as soon as land also worths and also chop prices were high. After the stock sector crash, few people had the money to buy land, and so land worths plummeted. When a financial institution had actually to forecshed and also sell the land also, they couldn"t

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consist of the difference. So, financial institutions would certainly take every one of the assets pledged to the loan. Families were often thrvery own off their farms and lost everything.

Harvey Pickrel (left) had 2 experiences through foreclosure. His father-in-law, Merle, couldn"t pay off his loan, so the bank marketed his farm at auction. But Merle was luckier than most. He kept farming – just now he was a renter rather than an owner of the farm. Later in the decade, Harvey gained behind on payments

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for a $400 tractor. In 1939, he came cshed to being foreclosed upon. But his banker was willing to provide him more time, and also Harvey was able to pay off the loan later on.

And some farmers and townspeople tried to uncover buyers of their property so they wouldn"t have actually a foreclocertain on their record. That"s exactly how Louise Dougherty and her husband, John, bought their initially home.

Written by Bill Ganzel of the Ganzel Group. First written and publimelted in 2003.

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Crash!What Followed the CrashWorldwide DepressionWall Street to RFDBurning Corn for FuelCouldn"t Even Buy a JobRFD to Key StreetBank FailuresForeclosuresPenny AuctionsRadical Farm ProtestsBarter EconomiesA New DealFDRNew Financial LawsWPAWPA Arts ProjectsSocial SecurityThe Politics of REALocal PoliticsPolitical AttitudesMarketing in the 30sA 1930s Balance SheetParityDepression Legacy