Evening star., 1932-08-07
HOOVER APPOINTS
HOME LOAN BODY
Fort Designated Chairman;
Speedy Organization to
Bring Relief.
Continued From First Page0

NOCAitAAAACd AOAlA I4lob 1 d6CHJ
president Of the Pennsylvania Build
ing and Loan League before he became
president of the notional leogue. an
examiner for the Pennsylvania Public
Service Commission and, at one time,
was burgess of Durmant, Pa.
Bodfsh, as executive manager of the
national building and loan organiza-
ton, took an active part in support
OF the home loan bank legislation when
1t was before Congress. Formerly he
Sociation of Real Estate Boards and
with the faculty of Northwestern Uni
versity.
DR.. Cries is we'll known in govern
mental circles here. A former director
Of the Harvard Bureau of Business Re
search, he came to Washington in
1921 as chief of the division Of build
ing and housing of the Department OF
Commerce, serving in that capacity ur-
der the then Secretary Hoover until
1928. Since that time he has been
chief Of the division of public instruc-
ton of the Department of Commerce.
He was member of the National Con-
ference on Street and Highway Safety
in 1924 and has played leading role
in the Presidents conference on home
building and home ownership. He is
treasurer of the advisory council OF
Better Homes in America.
Many to Share Benefits.
Home owners on the verge of dis
possession due to foreclosure proceed
mgs, investors in need Of cash. home
loan institutions confronted with large
demands for Withdrawals of funds-all
will share in benefits provided under
tic home loan bank law passed by
the last Congress. These related in
terests, whose plight is reported ex-
tremely grave in portions Of the South
and West, are looking forward eagerly
to administration of the relief measure.
The board will have the large re-
sponsibility of supervising creation OF
the regional discount banks. The exact
number of these banks and the areas
they will embrace are to be determined
bv the board. Each bank will be gov
erned by a board Of IL directors, 2 OF
whom will be named by the Home Loan
Bank Board, and the others, who must
be in the home financing business, Will
be elected by institutions holding ap-
proved memberships in the regional
banks All directors must be bona noe
residents of the regional area. :,
The small home owner-speclncally'
the buyer of a property worth up 10
$40 ,000-is singled out by the act Ior
special diSpensation OF relief unoer tne
supervision Of the new board. Inc
significance of the home owner IN the
Nations financial scheme is seen in the
fact that he is responsible for $2O,-
900 100000 in mortgages in erect To-Day.
Last year 10000 families lost tnelr
homes through foreclosure. In losing
their homes many of these unfortunate
home owners also lost their life saw
ings. which we're represented IN sacrl-
feed equities. During the last two
years the gravity of this situation has
Increased, contributing to the general
distress of a burdened people.
Credit to Be Supplied.
With the new relief machinery in
operation the home owner who Is haV-
ing difficulty meeting his mortgage
payments, his taxes, his insurance and
his repair bills will be extended a
helping hand by Uncle Sam.
Perhaps his building and loan asso-
ciation, his bank, his insurance COM
pany, or whatever type of financial in
Stitution that may be holding his mort
gage. is in dire need OF cash, ltSelf.
Unable to secure this cash and con-
fronted with mounting Withdrawals OF
funds by investors in need OF their
money. the loan association or other
institution is forced to notify the home
owner that his mortgage cannot be
renewed, although he may have been
regular in his interest payments for
in vain for some one willing to renew
the mortgage Finally he is notifleo
his home must be put on the block to
cofisfu the YnOrtOapp
1t is in cases such as this that the
Federal board plans to come to the
rescue of all concerned. The regional
discount bank will accept the mans
mortgage and the loan associations S
note as security for an immediate loan
to the institution. The latter, thus
supplied with necessary cash, s able to
meet demands Of its customers VINO
wish to withdraw their funds and at
the same time to carry the mortgage
of the distressed home owner.
The home owner even may secure
further loans from the bank with
which to pay his taxes and other es-
sential home maintenance costs, or to
make repairs needed to combat depre-
ciation of value. In this way he con-
tributes to the welfare OF his creditors
and, if he adds improvements to MS
home. aids his fellow workers In oo-
tanning employment.
Will Supply Capital.
Institutions eligible for participating
membership In the home loan system In
clude building and loan associations,
which alone hold So 900 600 900 of home
mortgages; cooperative banks, home
stead associations, insurance companies,
savings banks, trust companies and
other banks with time deposits, but ex-
cluding national banks.
The member institutions in each
region will supply the permanent capital
of the regional discount bank, but the
Government will subscribe the original
amount. which eventually will be repaid.
The regional banks will obtain cash
for loans to its member institutions
through the sale of bonds to the public
The bonds will have as collateral mort
cages and notes put up by the member
institutions in return for loans. The
home loan banks Will be restricted to
serving their members and are prohib-
tied by law from INDUCING In general
banking business.
While the home loan system is not
heralded by its sponsors as an imme
diate boon to home construction, it is
predicted that as the economic crisis
passes the new credit program will serve
as a tremendous stimulsnt to home
buying and building.
At the outset the plan Is expected to
save for their owners many thousands
CT homes otherwise scheduled to be lost
on the auction block Of mortgage fore
closure-a service that should go long
way toward restoration of community