Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-06
REALTORS TO ASK
PRESIDENTIAL AID
viii Sumbit New Mortgage
Discount Plan to Him
for Consideration.
Continued From First Page.)

(COnLlnueQ FlISb FdBe.D
4ect to frozen condition so far as &C
ks.pting new mortgages Is concerned.
6epositors under such circumstances
often are unable to withdraw their saw
figs, fact which disturbs the whole
financial structure.
20. Many lending companies have be-
come very restrictive and selective in
their, mortgage loan policies.
Short Term Financing Hazard.
"s Short-term home financing has
been always a hazard, deterring buyers,
investors and builders. The home owner
who is unfortunate enough to have a
short-term loan come due in period
of depression is a victim OF the present
system Innumerable homes have been
lost to their owners this past year due
to inability to reinance mortgage
loans.
"a The excessive cost of junior
financing has increased the cost of
homes and at the same time has driven
thousands of small builders out OF bust
ness.
Long time real estate mortgage in
veStments should be made available as
collateral security for debentures which
would be sold on the open market and
would be comparatively liquid. To ac-
complish this purpose the following ten
tative suggestions are offered for dis
cussion:
-. The Federal Government should
create a central residential mortgage
bank with regional discount branches,
the function Of the central bank being
supervisory.
% The members Of the regional dis
count banks shall be local mortgage
banks chartered under an act of Con-
gress. Such local banks would be au-
fhOriZe1 foka c1IhcpriYfinnS n their
stock from commercial savings banks,
trusc companies, building and loan asso-
Citations, mortgage companies and indi-
viduals dealing in mortgages under
certain uniform regulations laid down
in an act of Congress for the cont. 81
and operation of sub units. These
local mortgage banks shall in no case
deal directly with the borrower. Their
function shall be to determine the avail
ability and to submit to the regional
banks for purchase or rediscount, those
loans in the hands of stockholding
mortgage dealers or brokers, meeting
its requirements for rediscount. Each
local unit shall be member of its
regional mortgage bank.
Purchase Loans for Members.
'3. The function of the regional bank
would be to purchase first mortgage
l-ans from its members only and to
1s-ue debcntureS secured by such
mortgages as well as by its own capital
and surplus. The regional bank would
secure its capital and surplus through
the subscription of the local units.
Purchasable paper should comprehend
only first mortgages on urban reSiden-
t1al property, long term and amortized.
Income from not exceeding S.
900 Of these debentures might be made
tax exempt in order to stimulate pur-
chase by small investors.
a. Regional banks should lay down
certain regulations as to procedure and
appraisal which should be approved by
the Central Bank before becoming
cperab.e in the region
IS. 1t should be the policy of this
entire system by using conservative
appraisal methods and by requiring
n1ediately when the loan Is made, to
increase up to rs per cent the per-
centage of value that may be lent with
safety thus eliminating the costs and
hazards Of junior financing.
This plan we think is feasible and
will create a new field for conserva-
tive investment. 1t is designed to
serve the needs of the home buyer as
we see them. We believe that public
sentiment will accept and support this
or any other system which will meet
these needs"
Ask National Tax Conference.
The convention also went on record
requesting President Hoover to call
national tax conference, in which
Federal, State and local governments
as we'll as spokesman for taxpayers,
would participate, to devise means for
co-ordinating functional operations Of
the Government, securing efficiency
and economy in services performed
and to adjust the revenue system to
''mcre nearly meet the ability Of the
citizens to pay"
The appraisal division Of the
national body after a year Of study,
approved a plan for certihcation Of
real estate appraisers. The plan pro-
vides for creation of an institute Of