Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-24
RED|SCOUNT PLAN
APPROVAL GROWS|
Three States Adopt Mortgage
Proposal Sponsored by
National Body.

Indicating the growing interest
for q central mortgage bank to redis-
count real estate mortgages, which was
brought before the National Associa-
ton Of Real Estate Boards at Its May
convention, are the resolutions passed
last week by three State association
conventions, two of which commend
the association for bringing this plan
to public attention, and the other.
which definitely Endorses the mortgage
bank idea.
The central mortgage bank proposal
would create system similar to the
Federal Reserve, which would permit
the rediscounting of soundly financed
mortgages on urban homes through
regional or branch banks, thus pro-
viding a way to convert mortgage
paper into cash. which is not now
available
Resolutions were passed by the Mas
sachusetts Association of Real Estate
Boards, the New York State ASSocia-
ton Of Real Estate Boards and the
Michigan Real Estate Association.
Urges Study by Congress.
The Michigan resolution calls the
problem Of financial reconstruction one
Of paramount Importance and great
public concern to all home owners and
citizens of the State and urges study
Of this subject by members of Con-
gresS.
The Michigan resolution, which def
nitely Endorses 1.-The principle of Great
ing a central mortgage bank, or some
4fI f4r Nf
mortgages on homes on safe and
sound basis" also states, in part:
Real estate credits in Michigan and
the country are to large extent
frozen. which condition results in the
loss to many families of their homes
through inability to refinance; causes
stagnation and inactivity in real estate
and construction. contributes to unem-
ployment and distress, and to the
grave difficulties which many financial
and savings institutions are expert
encing; and
1T seems to us wrong and absurd
that credits and securities based on
real property which is the foundation
of our wealth, and which in the past
have proven to be the safest of all Sc
curities, should be so lacking in liquidity
as to create a problem OF major i'm
portance; and
I'VE believe this condition to be due
to q gap In the financial structure Of
our economic organization which re-
quires Federal legislation for its cor
rection."
COmmends National Body.
The Massachusetts resolution, adopted
at Salem, states:
Resolved, That the Massachusetts,
Association Of Real Estate Boards COM
mends the study being made by the
National Association of Real Estate
Boards Of the proposal for a central
mortgage bank Of rediScount for first
mortgages on homes.
This would enable loaning institu-
tons to rediscount good mortgages and
thus make available much needed funds
for home owners, particularly in times
of distress"
Calling attention to the fact that In
some sections of New York State there
Is abundance of money available Tor
first mortgages and q dearth of capital
in other sections, the New York State
Association Of Real Estate Boards ON
cially declared at Lake George, N. Y:
THAT we commend the National AS
ISOLATION of Real Estate Boards in Civ
ing consideration to the question OF
creating a central mortgage bank to
meet the situation which confrontS the
country, and that we give assurances
of our hearty cooperation in making
of such study and N the attempt to
solve this problem of great Importance"
The associat ton itself is studying the
possibility Of establishing central
mortgage bank through committee OF
five men appointed after the Baltimore
convention. A plan which describes
how the new system could be handled
throughout the country has been sub
mitted to President Hoover's Conference
on Home Building and Home Owning.