The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-11-14
HOOVER MAPS
GIGANTIC HOME
FINANCE PLAN
300, 900, 900 Program to
Be Given Congress
Next Month.
HOPES TO AID J0BLESS
President Believes Proposal
May Stimulate Boom
in Building.
BY HENRY r. MTSSELWITZ
United Press Stan Correspondent

United Press Stan Correspondent
WASHINGTON, Nov. 14.-Presi-
dent Hoover will ask congress next
month to approve a $1,000, 10000 900
home financing program designed to
revitalize the home building industry
and to keep "old man foreclosure"
from the American doorstep.
The Presidents program, outlined
at his Friday press conference, pro-
videS for establishment of a new
national system of home-loan dis
count banks.
The project would make avail
able some ST 5000 900 to aid thou
sands of persons to build and keep
their own homes.
For Small Home Owner
The discount banks, one for each
federal reserve district, would have
broadly the three fold purpose of
relieving pressure on home owners
and the banks holding their mort
cages; allayi1g unemployment by
overcoming the semi-paralysiS that
has gripped the home building in
dustry, and establishing perma-
nent mortgage rediscount system of
such strength as to combat in flu
ture years the deadening effect of
business depresSions.
The President emphasized that
the scheme, essentially, is to aid the
small home owner. For example,
the plan stipulates that the banks
are to rediscount mortgage loans on
homes, but that no such mortgage
is eligible for rediscount if it ex-
ceedS $4,000.
Many loans undoubtedly will be
for less than $4,000, so the pro-
gram holds the possibility of di-
rectly affecting perhaps more than
a million persons, besides indirect
benefits to countless others through
stimulated employment and revived
activity in the building industry.
Hopes to Stimulate Boom
The President hopes to stimulate
a building boom to aid unemploy-
ment and it was pointed out that
home building has fallen off nearly
80 per cent in recent months, due
to fear that the prospective home
builder could not pay for his house
on present terms.
Normally, Mr.. Hoover said, some
100000 homes are built in the United
States each year, valued at ST.
GOO, 100000. He felt if that activity
could be restored, it would go a long
way toward solving the unemploy-
ment situation in many sections
this winter.
The idea behind the scheme, as
the Presidents statement explained
it, is to permit banks all over the
country holding mortgages on homes
to rediScount those mortgages with
the new banks. The local banks
can pass on this relief from pres
sure of credits falling due to the
home owner Or builder.
Money Raised Locally
AS it is, many banks hold mort
cages on homes that are past due
and the owners can not meet them.
The banks or the building and loan
associations do not want to fore
close. They then would find them
selves owning an increasingly great
number of houses and land from
which they derived no income, but
on which they had to pay taxes and
upkeep.
The twelve new home loan dis
count banks would have an original
combined capital of $150,000,000 I'M
der the plan. This would make it
possible for them to rediscount
mortgages up to $1,800,000,00O.
The money would be raised locally
in the sections designated. If sec
ton failed to subscribe the capital
needed, the government would make
up the total, with scheme to turn
over the governments stock to pri-
vate ownership as rapidly as pos
Sible.
Subject to Approval
Each bank is to have an initial
capital of $5,0O0,OOO to $4,000 900,
depending on the need in its dis
trict. They will conduct no original
business. but will be restricted pure
ly to rediscounting mortgages held
by such institutions as building and
loan associations, savings banks,
farm loan banks, and the like.
The maximum amount to be ad-
vanced against mortgage collateral
shall not exceed so per cent of the
unpaid balance in the case of Short
term loans, and go per cent on long
term loans. No advance is to be
made on mortgages in default.