Evening star., 1933-11-13
HOME
MORTGAGES TO Be.
TURNED INTO FUNDS.
Fahey Announces Liquidation
Plan for Closed Insti-
tutiOnS.
TEN STATES COVERED
so FAR BY SURVEY
Chairman of Boards of Bank and
Corporation Takes Office Sue
ceeding Stevenson.

Plans for the Home Loan Bank Board
and Home Owners Loan Corporation to
take over mortgages now held by closed
banks to speed liquidation of those in
stitutions were announced today by
John H. Fahey, new chairman of the
bank and corporation boards, who as
sumed Office today, succeeding William
F. Stevenson.
Mr.. Fahey announced that a prelimi-
nary survey made in 10 States shows
that total of 5000, ,6s4,4 in mortgages
is being held in the banks. 1t Is the
plan of the board to take over these
mortgages in exchange for bonds. The
bonds, in turn, may be cashed on a
basis of 80 per cent by the Reconstruc-
tion Finance Corporation.
SO far the survey has covered closed
institutions in California, Massachusetts
New York, New Jersey. Iowa, Pennsyl.
vania, Indiana, Michigan. Ohio and Illi~
nois. Representatives of the corpora
tion also are at work in other States
and it is the plan Of Mr.. Fahey to have
the same process carried out throughout
the country.
100000 in Bay State.
Mr.. Fahey would not make an esti-
mate of the number of depositors who
would be affected by dividends arranged
through the bond sale by the banks N
the r. F. c., but he pointed out thai
In Massachusetts alone more tha,3
100000 people would be affected.
The new chairman also announced
that the Home Owners Loan Corpora
tion has set out to obtain a corps OF
competent appraisers in every State ii
pass upon applications for refinancins
mortgages. This was the only refers
ence he made to any possible changes
IN personnel. Employment OF the new
appraisers has already begun and Mr..
Fahey said that so far as possible men
would be used who are already familiar
with the territory to which they would
be assigned. More than 100000 apph-
cations have been filed to date, he said,
a large proportion of which have had
to be rejected.
In some cases, Mr.. Fahey declared,
there have been applications plainly
filed for the purpose of "chiseling. !"
These, however, have been few. Many
of them, he said, have written pathetic
letters to the board, but analysis by
board employees has shown that their
grief doesn't stand up.
Confidence in People.
In the MAN." he said, "our expe-
rience has tended to restore our conf
dence in the people as a whole. We
are convinced that most Of them are
honest and square"
A large proportion of the boards dis-
ficulties have come from people who do
not understand the purpose of the
home loan act. A number of them, pe
said, are able to meet their obligations
but have the idea they can refinanse
their mortgages on per cent basis
rather than to continue their payments
on a per cent basis. Such cases, le
said, have slowed up the work of THE
board because of the time necessary 20
ascertain the facts.
Another large number have bee.a
found to come from people Temporarily
frightened who have later found tbas
they could pay of and voluntarily ha Fe
withdrawn their applications.
Mr.. Fahey also announced organiz.-
ton of the First Federal Savings aDsi
Loan Association. An organization set
up to reach the / ,666 counties in tire
United States now without building aid
loan financing facilities. This assocjlt-
ticn is located at St. Petersburg, Fla
Charters have been approved for IS
more. he said, and 86 others are In TIE
process Of organization. The board has
an appropriation of S100, 900 900 for the
purchase of stock in such associations.