Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-03-19
HOME LOAN BANKS
URGED AT HEARINGS
National Real Estate Boards
Officials Appear Be-
fore Senators.

Hearings on the measure proposing
creation of q system of Federal home
loan discount mortgage banks were
started this week by q subcommittee
of the Banking and Currency Com
mittee of the House, headed by Repre-
sentative Reilly of Wisconsin.
The measure calls for the creation
of a system of IL new banks whose
business would be restricted to the
discounting of first mortgages on homes.
1t is suggested as means OF max
ing more liquid dwelling finance Iunds:
Principal proponents OF the Dill are
oficiaIs of the National Association OF
Real Estate Boards and of the United
States Building and Loan League.
At recent hearings on the same
measure, introduced in the House by
Representative Luce of Massachusetts
and in the Senate by Senator watson
of Indiana opposition came principally
from a spokesman for the Mortgage
Bankers Association Of America.
Witnesses speaking for enactment OF
the legislation at the hearings before
the House committee Included Repre-
sentative Luce, Lawrence 7: steven
son. president of the National Associa-
tion of Real Estate Boards: Gen. Ma
than William MacChesney, general
counsel for the realtors; c. c. Sherlock,
managing editor Of a national maya
zine; o. K. La Rogue, assistant fnsur-
ance commissioner of North Carolina;
w. C.. Ermons, president OF the New
Orleans Homestead Clearing House AS
ISOLATION, representing Louisiana build
ing and loan associations; Eugene w.
Lewis. Detroit banker and manufac-
turer. and William E. Best and !;
Friedlander, representing the United
States League of Building and Loan AS
Eociations.
Prices of residential real estate are
weighted down by lack Of credit sup
port for this kind of property, the
Home Building and Home Owning
Committee of the United States Build
ing and Loan League concludes after
five months study of the present de-
cline. The only practical suggestion to
remove the barrier has come from the
Government in the form Of the Luce
Watson bill, proposing the establish
ment of a Federal home loan bank
system, the committee says.
1.-THE present slowness Of the reslden-
tisl realty market has been blamed on
everything from the Miami bubble to
the lack of family desire for home,
says Ward B. Whitlock, Springfield,
Ill, chairman of the committee. our
is responsible. The real problem is
that any market restricted to the abil-
ity of buyers to pay cash must neces-
sarily be very narrow market. ana In
such times as the present, it would have
practically no bottom. Adequate credit
support Is a necessity in maintaining q
market for any commodity. 1t is OF
paramount Importance in the home
market. since the cost of the home Is
greater in proportion to the family IN
come than clothing and food. Its use
extends over long period OF years,
and the type Of credit needed Is DELI
nitely long term.
UnfayorabIe Pressure.
'rThe home which cannot be ref
nanced Is today exerting unfavorable
pressure upon the market. In 1880
the census-takers found 4,061,6sS
mortgaged homes In the United States.
Building and loan associations are n
nancing more than a half Of these on
the long-term, amortization plan. which
There remain some 100000 being n
nanced by straight mortgages, averag-
ing a four-year term and $4,000 In
amount.
In a three-year business depression
such as the present, three-fourths OF
these straight mortgages, or about a
million and q half, would come due
for refinancing, involving 90. 600, 900 900.
TIE 100000 amortized mortgages, de-
manding no refinsncing, saved the cred
it structure the strain Of another So
100000 during this period. The
reflnancing, difncult to get at the be-
ginning Of the crisis. has become al
most an impossibility now. Each year
of the past three has had to face the
potentiality of half a million existing
homes being thrown on the market be-
cause the mortgages could not be re-
newed.
Bill Favored.
THE Home Loan Bank bill, as in
troduced by Senator Watson of Indiana
and Representative Luce Of Massachu-
sets, has been favored by weighty
evidence In Senate subcommittee hear
1ngS. Its passage Is essential to pre-
vent further decrease in home financ-
in, and it TO the interest of every citi-
zen in any way concerned with home
property values" 4