Evening star., 1932-10-01
NEW LOANS AIDING
PROPERTY VALUES
Federal Home Bank Funds
Expected to Improve
Realty Market.

An important IeledSt Ol CdplIdl nl-
ready has been experienced in many
centers and a measurably good effect
on real estate values and the real estate
market is expected to follow the open
ing of the Federal Home Loan Banks
October Is, according to the National
Association Of Real Estate Boards.
Lending institutions are making
loans or renewals they have been
hesitant to make heretofore. Franklin
w. Fort, chairman of the Home Loan
Bank Board, states from information
coming to the board, the association
reports
Institutions now joining the new
home banking system are doing so for
the definite purpose of drawing upon
the capital supply it makes available,
the national realtor body finds.
On the day of the opening Of the
new banks, at one stroke, a total OF
S134, 100000, in effect, will be injected
into the process of liquifying present
home mortgages, with practical po-
tential credit possibility of $l,000,000,-
900 to $1,250,0O0,000 from the de-
bentures which the board has stated
expressly will be issued as needed, the
realtor statement adds.
LUdH uHuS SVuSHts
1T is estimated that not less than
10000 banks and corporations will ap-
ply for these loans" memorandum OF
the American Legislators Association
under date of September 10 states.
An editorial in Banker and Trades
man, Boston, for September 3, sums up
the real estate outlook: THE real es-
tate investor of the present day can
look forward to lower taxes, sounder
taxing methods, rising values over the
long pull, cheaper mortgage money,
greater liquidity in the mortgage mar
ket, due to the new (home loan) bank
ing system, better and perhaps less
costly construction charges and bet
ter understanding all around. Alto
gether, shreWd investment in real es-
tate now bears promise of better yields
during coming years than it has for
several years past"
Commentators this week point out
that there is indication that life insur-
ance companies, which have for years
invested the largest single portion OF
their assets in mortgages, will find
themselves turning more definitely than
ever to the home mortgage field. The
comment is based in part on the sltua-
ton of rail securities. A study of mort
gage investments of $50 leading life in
surance companies for 1881, made by
the National AsSociatio of Real Estate
Boards, showed IN that year approx
mately 40 per cent Of their assets in
vested in mortgages. 1t showed average
earnings of the companies on various
types of investment to be as follows:
Mortgages O50 companies), 5.86 per
cent; bonds Q47 companies), 5.12 per
cent; stocks (76 companies), ACT per
cent.
Combat Foreclosures.
Meantime, the National Conference OF
Banking and Industrial Committees, set
up to draw credit into use where it is
soundly needed, has taken for its first
objective the hating of unnecessary
foreclosures of homes. A network OF
business leaders, one for every State,
is to give its whole attention to promot-
ing mortgage adjustments.
Ogden L. Mills, Secretary OF the
Treasury, and Eugene Meyer, governor
of the Federal Reserve Board, are men,
bers of the National Executive Com
mittee of six who outlined this action,
the first detailed project which the
business committees have undertaken.
State vice chairmen for the work are
to have assistants for each Of the large
cities
The national committee recommends
that local action follow the plan OF
procedure used successfully by the Joint
Welfare Committee of the Philadelphia
Real Estate Board. which has now be-
come identified with the Philadelphia
Business and Industrial Committee. 1t
cities particularly the reinstatement
plan used by the Philadelphia commit
tee. The plan leaves the existing mort
gage undisturbed. but provides for pay
ment by the lender OF taxes in arrears
and reduces the monthly payment by
the borrower to the amount he would
pay if a new mortgage had been drawn
to cover the unpaid balance OF the
mortgage and the taxes paid by the
mortgage.
Advisory Work Reported.
Vigorous action of real estate boards
is under way in a number Of cities to
stop unnecessary foreclosures and
scotch parasite practices of persons
taking advantage of distressed home
owners seeking mortgage renewals.
The Long Island Real Estate Board
and the Baltimore Real Estate Board,
which have set up Home Owners Ad-
yisorv Bureaus; the Chicago board, the
Philadelphia board and the New Or
leans board are among the boards re-
porting action against malpractices, eX-
orbitant charges and unnecessary fore
closures.