Evening star., 1932-08-16

loans on Office buildings, apartment
houses, hotels and large private dwell
ings. We are interested in the loan on
the home of the ordinary citizen. AS
pointed out, he today is suffering ire
mendously from the stringency In the
mortgage lending market. How our
system will help him is the question
that am sure many Of you are asking.
Won't Renew Mortgage.
well. let us suppose you have q
mortgage held by a savings bank In
your city which is due or Is coming Que
in the next few months. AS matters
are today, that savings bank feels that
it must realize upon its good assets,
where possible, in order to get casn II
its depositors demand 1t. Consequently
it is not inclined to renew your mort
gage and Is demanding payment AT
the same time, all OF the otner panks
and building and loan associations IN
your town are likewise anxious TO keep
their funds as liquid as possible to meet
the always uncertain demands OF de-
preston times.
"ConseolIently. YOU can find no one
else who will make you new mortgage.
Therefore, you are threatened with the
foreclosure of your home and perhaps
the wiping out of your lifetime savings.
AS soon. however, as the Home Loan
Bank System is in operation, this whole
situate / should change. In the nrst
place, the bank which now holds your
mortgage can become a member OF the
system. Immediately upon its becom-
ing q member, not only your mortgage.
but IL per cent of all the home mort
cages which it holds become rediscount-
able at the Home Loan Bank. Conse-
uuently, it does not need to put pressure
on you for repayment, since. In the
event it has need for substantial funds
quickly, it can secure them from the
Home Loan Bank by loan at low in
tereSt against your mortgage and others.
Another Illustration.
Lets take another illustration. Sup
pose YOU have no mortgage on your
home today, or only small one, and
YOU need funds with which to pay your
taxes or to make repairs or temporarily
to live, or for other real needs. Until
the Home Loan Bank System Is operat-
ing no institution will make you loan
because it desires to retain strong caSn
position to meet the possible demands.
Immediately upon the setting up OF the
Home Loan Banks, however, as have
said before, this pressing need for
liouidity will be removed and good
mortgages can be used instantly to Sc
cure funds If needed. After all, insur.
ance companies, savings banks and
building and loan associations make
their profits out of lending money on
mortgages. They would like to make
new loans If they dared. Their mem
bership in the Home Loan Bank system
will make them dare and II they are
already short Of funds they can secure
upon the mortgages they now own, ad-
vances with which to make new loans.
Finally, the Home Loan Bank, as long
as any Government capital is In the
system, will have the power to make
direct loans on first mortgages up to
the same percentage of the value OF the
property that they may loan to institu- tl
stitutions generally will be very glad to
relieve the Home Loan Banks OF this
necessity by making the loans them
selves in the first instance, rather than
to have their Government in competl-
ton with them in their business.
I'VE expect here in washington to