Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-05-30
REALTY DISCOUNTS
SOUGHT BY NADLER
Finance Institute Director
Proposes Corporation to
Take Over Loans.

Detailed analysis of the benefits con-
templated from establishment in this
country Of a central urban discount cor
poration having as its business the buy
ing or discounting Of mortgages from
various existing agencies lending money
on urban real estate was presented by
Marcus Nader assistant director of the
Institute OF International Finance, at
the Baltimore Convention this week OF
the National Association OF Real Estate
Boards.
Establishment OF such an institution,
to enable the pooling of individual mort
cages and the issuance OF bonds secured
by these mortgages, is greatly needed to
stabilize the flow OF funds into the real
estate and building industry. and would
be an important and powerful factor in
the restoration of more normal business
conditions, he said. 1t would not only
bring about rapid revival of industry
| and trade, Mr.. Nader asserted, but
would also lay the foundation for sta
bilizing industry in this country in the
future against booms and depressions.
Now Used In Europe.
Central mortgage institutions, which
exist in practically every country of
Continental Europe and in a number Of
countries Of South America, established
in many cases with the aid Of the gov
eminent. have given the homeowners
Of these countries in the financing Of
their homes access to the capital mar
kets of the world, he pointed out.
They have enabled the citizens of
Germany. France. Denmark, Hungary,
Finland, Jugoslavia and other countries
to borrow money In the United States
Il Nu.INt 20 I.aIt- lN,,il
ing and other real estate development
Mortgage bonds Of Europe an and South
American central mortgage institutions
are now outstanding in the American
markets to the amount OF more than
5000 900, 900. Mr.. Nader said.
The central urban mortgage discount
corporation should not deal directly
with the public" Mr.. Nader held. "Un-
der present conditions a cenral bank
for urban real estate which would be
In direct contact with the borrower, as
and South America, is out Of the ques-
ton.
Urges Central Corporation.
Establishment of a cooperative sys-
tenn, such as Is in use in some European
countries, would not be the best solu-
ton. Americans, as a whole, are not
glV@n 10 cooperation. 10 organize nome
owners into co-operatives might be a
task that would last for decades.
The most practical plan to meet
American conditions. 1t seems to me, Is
a central urban mortgage discount cor
poration that would buy or discount
mortgages from savings banks. small
commercial banks. building and loan
associations, insurance companies, mort
gage corporations, and others whose
main functions or business Is the lend
ing OF money on urban real estate.
On the basis Of these mortgages. the
central mortgage discount corporation
would issue its own bonds which would
be secured by the mortgages of the in
dlvidual borrowers. and by the capital
and surplus of the central bank"
The advantages of drawing capital
from all over the world at low rates was
the initial reason for the action of q
number of European countries in estab-
fishing central mortgage banking sys-
tenn. Mr.. Nader said. The German gov
eminent, for example, in 1925, realizing
the great need for capital and knowing
that this demand could not be met in
the domestic market established an in
stitution large enough to command
credit in the international markets, with
the result that the German Central
Mortgage Bank borrowed in the United
States alone ovsr $l00,000,000 at. rates
which could not be obtained in post
war Germany.