Evening star., 1933-11-30


owner has not had the money to make
such repairs. 1t is in these cases that
the Government can render a great
service not only to the home owner but
to the Nation as a whole, since this
work Is an important part Of the ma
tional recovery program"
Regarding the bonds of the corpora
tion, Mr.. Fahey said: These are sound
bonds on which the holder Is not only
certain Of his interest, but may be
equally sure of full payment of princi-
pal when due. They are the bonds Of
a mortgage bank with the largest sub
scribed capital of any such institution
ever organized and all that capital
$500. .ooo, represented by stock. is
provided In cash Of the United States
Government-your Government"
Important to Mortgage Firms.
'"The success of the Home Owners
Loan Corporation" Mr.. Fahey con-
tinued, Is as important to every saw
ings bank, building and loan association,
insurance company and other mortgage
lender as it is to all home owners and
real estate interests since the continu-
ance of condition under which it is
practically impossible to sell homes at
anything like fair value is menace to
the safety of every financial institution.
We cannot expect to attain that pros
perity which this country has right
to enjoy if we are to deprive hundreds
of thousands Of people Of their homes
they have struggled so hard to own and
turn armies of our citizens into the
streets"
The full text of Mr.. Fahey's address
follows:
In spite OF the fact that nearly 300
Offices Of the Home Owners Loan Cor
the country, and wide publicity has
been given to Its work, there Is still
considerable confusion, apparently. as
to the powers and methods OF operation
of the corporation.
We continue to receive tens Of thou
sands of requests for information as to
what the corporation may do to save
homes that are threatened with fore
closure. A clearer understanding on
the part of the public Of what the cor
poration has authority to do, and what
it cannot do, will expedite the work,
relieve the employees OF the corporation
of unnecessary burdens, and be OF great
assistance to those home owners who
Sre in serious difficulties and entitled
to help Immediately.
Only Needy Cases Considered.
The Home Owners Loan Corporation
was not organized to take over every
home mortgage in the country. 1t can
not meet the desires Of the home owner
who is having no real trouble with his
present mortgage, but who would like
to transfer the loan to this Government
Institution and have Is years to pay it
off with lower rate of interest than he
Is paying now to one of the long-es-
tablished mortgage lending institutions.
This corporation cannot deal with cases
of this sort. Home owners of this
group should continue their mortgages
With the institutions with which they
have been doing business. They should
be careful to maintain their credit
standing with these mortgages by liv-
ing up to their obligations when they
are perfectly able to do it.
Unfortunately, because of prevalent
misunderstanding, many thousands OF
people all over the country have filed
applications with the Home Owners
Loar Corporation who are in no diff
Guilty with their mortgages. A large
N3portion of tta banks and. other
ksSxtsage lenders holding these mort
elges are entirely willing to continue
them and are doing everything in their
power to accommodate their borrowers
After investigation, the corporation Is
H1nged to tell these applicants that ii
fbnnot take over their mortgages, but
meanwhile, because the facts must be
looked up, the work of the corporation
Is increased greatly and there is much
unnecessary waste of time and money
Nearly one-third of the applications
filed at our Offices thus far are of this
character. OF course, the necessity OF
investigating such applications inter
feres with our attempts to take care Of
whom the law contemplates We shall
help.
Owners Seek to Force Loan.
It will be of great assistance to the
corporation, therefore, if those who are
in no danger of having their homes
taken away from them through fore.
closure proceedings. will refrain from
filing applications in our offices.
Unfortunately, in too many cases oul
investigations show that people have
stopped meeting their mortgage pay
nei1ts with the institutions carrying
their loans in order to precipitate ac-
ton and as they think, get into posi-
ton where the corporation will be
obliged to take over their loans. This
Is very unfair and very unwise pro-
cedure on the part Of any home owner
The corporation cannot accept loans
where it is apparent that the hcme
owner has neglected to pay his obliga-
tionS when he was able to do so, and
defaulted only for the purpose of fore
ing. If possible, the transfer of the
mortgage to us.
Since the corporation cannot take the
loan under these circumstances, the
home owner places himself In mos
unfortunate position, for he has i'm
paired his credit with the institution
at present holding his mortgage ano
seriously injured his reputation for gooe
faith. 1t should be said that the num-
ber of cases where home owners have
defaulted deliberately in the hope o!
securing a long-term loan through the
Home owners Loan Corporation at 9
lower rate Of interest Is relatively small
Most of these cases have arisen as 9
result of misunderstanding.
Loss Must Be Threatened.
The mortgage cases which the corpo.
ration can care for are those whert
the home owner, because of ciycum
stancef beyond his control, has not beer
able s akeep up interest or prfncipa
payments on the home in which ne ha