Evening star., 1933-04-13
Permanent Plan of
Loan Agencies Also
Provided.
BILLS INTRODUCED
In BOTH HOUSES
President Demands Con.
gress Put End to Fear
and Despair
by the Associated Press.

by the Associated Press.
President Roosevelt added to
his emergency program on Capt.
tol Hill today the proposal to re-
finance the mortgages on small
homes.
In special message to Con-
gress he asked for legislation to
permit readjustment of existing
mortgage debts, together with a
poStponement of both interest
and principal payments in cases
of extreme need"
He suggested action along the
same lines as the refinancing of
agricultural mortgages, now be-
fore Congress, with a bond issue to
meet the needs.
He told Congress the plan of settle
ment will provide standard which
should put an end to present uncertain
and chaotic conditions that create fear
and despair among both home owners
and investors"
Bills in Both Houses.
Bills were introduced in Senate and
House at once to carry out his RECON-
mendationS.
Creation of permanent system of
Federal savings and loan associations
as well as an emergency $4,000, 100000
corporation to rellnance. home mort
q q ic oIIthnri1ad rIy,dar thn hills
The bill would authorize subscription
Of S100, ,000, 900 by the Government for
setting up permanent system of Fed
eral associations ito provide mutual
thrift institutions in which people may
place their savings and invest their
funds, and in order to provide for the
financing of homes"
These institutions would be in the
nature of building and loan associa-
tions, but the bill provides they should
not be established in any community
unless the Home Loan Bank Board
feels such community ''is insufficiently
ing institutions"
Emergency provisions of the bin for
refinancing existing homo mortgages
are drafted along the lines of the
pending agricultural refinancing meas
ure and are designed to save thousands
Of city home owners who are burdered
with debts.
Loan Agency Provided.
A Home Owners Loan Corporation
would be created under the Federal
Home Loan Board with a capitalization
of 5000 600, 900 subscribed by the Fed
eral Government. Funds would be OBJ
tanned through the Reconstruction
Corporation.
The Home Loan Corporation would
be authorized to issue tax-exempt
bonds up to $4,000, 900, 900 at per cent
interest, which would be exchanged for
existing mortgages. The Government
would guarantee the interest but not
the principal.
Bonds exchanged for mortgages
would be limited to 80 per cent of the
value of the mortgage home, as ap-
praised by the corporation. Relnancing
would be limited to homes valued at
$4,000 or less, occupied by not more
than three families.
Any mark down in the face value Of
the debt accepted by the mortgage
would be credited to the mortgager.
The home owner would amortiZe his
debt to the corporation within is years.
with interest at 5 per cent. The board
would have authority to grant three
year extension of time for payment of
principal or interest
In refinancing the home owner, the
corporation could advance cash for the
payment of taxes or assessments. or
provide for necessary maintenance or
repairs.
Cash Advances Carried.
Cash advances for these purposes
also could be made to home owners
whose property was not mortgaged up
to 80 per cent of the value.
Federal savings and loan associations
would be set up under rules and regu-
lations prescribed by the Home Loan
Bank Board, giving primary considera-
tion to the best practices of local mu-
tual thrift and home financing institu-
tions."
But no such association shall be in
corporated by the board" the bill says,
unless in its Judgment the community
to be served is insufficSently served by
local thrift and home financing insti-
tutions.
Such associations shall be authorized
to make loans upon homes secured by
duly recorded home mortgages and to
invest their funds in obligations of the
United States and in Federal Home
Loan Bank bonds"
Each association would automatically
became member of the Federal Home
Continued on Page 2. Column So
c1EQ Kan 2 Z r I0AM