FHA Mortgage Guide

The New York Times had a nice article over the weekend regarding Sears kit homes. These were houses you could buy from a catalog. You’d place your order and then a kit would show up ready for assembly. Between 1908 and 1940, says the article, more than 100,000 kit homes were sold.

The part in the article that jumped out, however, had very little to do with wooden parts or windows. The paper interviewed Amy R. Pappas, co-curator of the New Castle Historical Society, and here’s what was reported:

“In the 1930s, during the Depression, the housing market took a sharp downturn, and by 1940, Sears stopped selling kit homes, as many people had lost their jobs and defaulted on their loans. In 1934, Sears liquidated more than $11 million in mortgages and stopped financing kit purchases.

“’Because Sears did not want to be known as a heartless corporation that took people’s homes from them,’” said Ms. Pappas, the curator in New Castle, “’it absorbed most of the losses.’”

Imagine that! A lender that absorbed losses rather than ruin its reputation — even though the lender was not the source of bad loans, bizarre terms or toxic clauses.

Whatever happened to such lenders?

For the full story, see: It Arrived in an Awfully Big Kit

Check out these FHA resources for more information

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