Evening star., 1933-04-13
ROOSEVELT SPURS
SMALL HOME AID
Special Message Projects
$1,000, 100000 Agency
for Refinancing.
Continued From First Page.)

tCO0ClnueQ FROM f1ISG EdSc.D
Loan Bank of its district in the same
manner as other institutions.
The Treasury would subscribe to cap
ital in such associations up to 100000
at the request OF the board, put the
amount paid by the Government could
not exceed capital subscribed by other
shareholders.
Retirement of Holdings.
After five years, each association
would set aside one-third OF its receipts
to retire the Government holdings.
Any member of home loan bank
could convert itself into Federal in
stitution by vote of its stockholders and
subject to the regulation of the board.
A separate appropriation of $780, 900
is authorized by the bill to enable the
board to promote organization OF these
associations.
The bill would repeal that section of
the existing home loan bank law under
which Federal home loan banks are
authorized to loan directly to home
owners.
Mr.. Roosevelt, in his message today
emphasized he regards the legislation
a declaration of national policy requir-
thrown around home ownership as
guarantee of social and economic sta
bility."
20 Billions Outstanding.
Senator Robinson, Democrat, of Ar
kansas, in an explanation of the bill,
said there are $40, ,000,0 900 outstand-
ing in home mortgages.
1.-The administration is making an
1Er- I,,, %1,fe hi 1.n eaiI Y1d
primarily to give immediate relief to
the small home owner now in distress
and to the mortgages holding these
mortgages, and to provide for the pay
ment of taxes to prevent the loss OF
homes, and. at the same time, to pro-
mote the development of sound SyS-
tenn of permanent home financing.
THE Federal home loan bank sys-
tenn, which is now advancing about
$40, 900 900 a week, the major portion
Of which is going into home loans, is
not disturbed in any way, and 1t is
expected that these banks Will issue
bonds, as provided in the Federal home
loan bank act, to further expand the
resources of their members to continue
lending operations until the nome
mortgage market is fully served.
Explaining the provision for emer-
Robinson said:
"It is intended by this provision to
provide special relief for the small
home owner and it is estimated that
these figures will include approximately
three -fourths in number of American
homes.
"It is hoped that this plan will give
relief to many small home owners
whose mortgages are held by nstitu-
tions unable to carry the same, and
at the same time give these institu-
tions the reasonable present value OF
their mortgages in bond with interest
guaranteed by the United States and
give the home owner per cent
mortgage, amortjzed over period of
Is years, which will result in home
owners having very low required
monthly payment for interest and
principal"
Subscriptions Clarified.
Robinson said the proposal for Fed
eral subscriptions to the stock of the
savings and loan associations was very
similar to the investment of the Gov
ernment in preferred stock Of national
banks"
"All their funds are to be loaned on
homes in the community, and provision
lS lIldQc lOl lul lllcl chJdllSlOIl VI lliclI
funds by borrowing from a Federal
home loan bank so that about SO can
be loaned on home mortgages by this
means for every dollar put up by the
United States" Robinson said.
These associations are provided for
as permanent institutions which will
continue to provide the people means
of saving their own money to finance
their homes in communities which are
not now served"
Robinson said it was estimated these
associations would be formed in about
one-third of the counties of the ma
ton which now have no means of f.
nancing their homes.
Repeal of the direct loan section of
the home loan act is provided, Robin
son said, because it has proved to be
unworkable"
A major change was made in the
emergency Home Loan Bank bill be-
fore it was introduced in Congress.
Although it had originally called for
refinancing homes valued up to $20,-
900, the limit in the bill as introduced
was fixed at $4,000, There was no
explanation of the last minute change.