Evening star., 1932-09-14
HOME LOAN BANK
TO NAME BOARDS.
Action Started as Drive
Opens Tonight for Sub
Scrlptions.

simultaneously with the announce
ment that stock subscription books oi
the Home Loan Bank system would be
o2ened i'll the IL districts by tonight
to sell sl34.O00,000 in capital stock
Chairman Franklin w. Fort of the new
Federal board said today selection OF
IL directors in each of the regional dis
tr.cts would start at once.
rIr. Fort would not predict how soon
the board expected to complete this
task. Approximately 5000 applicants
for these positions have been received
at organization headquarters.
The chairman said the board would
not consider whether branches Of the
regional banks would be established
until after the regional institutions had
begun operation. He said the question
had not been discussed and 1t was the
desire of the board to get the system
in operation before doing so.
Opening Carefully Timed.
1t was explained that in some cities
designated to carry on subscription cam
paigns the sac of stock would be opened
earlier in the day, but those on the
Pacific Cast would not be opened until
7oclock tonight. The action will COM
ply with the law by enabling the system
to have its books open 80 days before
the regional banks begin functioning
October Is.
Mr.. Fort said the board had received
advance pledges for subscriptions and
that they were gratifying. He de-
clared in Texas the pledges have
amounted to s500000. while in New
Jerzey the response was very fine"
He asserted the neaness Of the OPEN
ing of the regional banks had served to
cause lending institutions to be more
liberal with their funds.
"A great many institutions" he ex-
planned, have been in position to
freeze themselves up. Now that they
realize they will be able to get money
on october Is, they can take some OF
their money and loan it. They don't
feel the pressing need of retaining
liquidity they have felt all along"
The chairman said the board had
been notified that building and loan
leagues in several States would set up
clearing houses" for loan applications
He explained that the board was receiV-
ing applications for loans and letters
of mortgage difficulties daily.
Aid for Investigation.
The function of these clearing houses.
he said, would be to allow the board to
clear these applications back to the 10
cality for investigation and. if possible,
to make loans. He classed them as
groups of lending institutions.
"They will proceed to make loans
without waiting for us to get started,
n he CaiG
applications may be passed over to US
and some may not. In some States the
institutions are not eligible to borrow
from the beard; in other States they
will be non-meznber borrowers"
Mr.. Fort said there appears a ten
dency on the part of going banks to
loosen up on their foreclosure pro-
oeechngs. He declared the board had
received word indirectly that some of
the largest institutions in the country.
without announcing that they were do
ing it, have instructed their agents.
whsre any hope exists, to withhold
foreclosure action.
Until it became evident that this
organization was going to function at
reasonably early date" he explained,
these institutions saw no hope Of get
ting any mortgage holder to come in
and bid the property in Now that
they see the possibility Of somebody
getting money to come in and bid, 1t
Is different In cases where they are
hopeless where an institution Is limited
by law to so per cent Of the value, it
is different"
"If man Is behind in his taxes or
his property needs repairs, they can't
loan him any more money" Mr.. Fort
added. ON the other hand, the build
ing and loan associations in most States
can loan more than so per cent and up
to rs per cent in some States.
Loss Can Be Prevented.
"If they are financed SO they can make
loans to clear UP the encumbrances.
then the savings banks that are limited
to so per cent can get out end the
building and loan associations will lerd
Stopping the running Of tPXes and othe-
penalties. which are wiring out the
property holders equities