Evening star., 1933-04-22

over LIE COuulIy, IGpltoSlIGllIS IllS
financing institutions which are h
on American homes today.
Leaders in the building and loan
field look upon Mr. Roosevelt'S small
home mortgage refinancing plan as
one Of the most important features
of the administrators reconstruction
program.
mo part of the new deal program,
so far announced, carries more i'm
portant implications for so large por-
tion of the citizenry than the home
mortgage plan introduced in Congress
April 49," comments Ward B. Whit
lock of Springfield, Ill. president of
the United States Building and Loan
League Mr. Whitlook will preside at
the sessions to be held here.
Wide Interest Aroused.
Nation wide interest is focused on
this proposal to create Federal agency
to relieve the burden on the small
home owner-a proposal which comes
at time when the number of mort
cages on small homes in the United
States runs into the millions and the
rate of foreclosures on real estate is
nearly 300 per cent higher than in
1926, according to Federal statistics.
Out of the Washington meeting Of
building and loan experts doubtless
will come recommendations which they
believe should be included in the
presidential program as mandatory
for the welfare of more than 100000
families affected. They believe that
because of their wealth of experience
in the home mortgage business they
are the logical ones to make recon-
mendations as to the new program.
Many of the men to attend the meet
ing are on the directorates of the Fed
eral Home Loan Banks of their sew
eral districts, and are committed to a
sound program for the permanent
home financing structure of the Nation.
The proposed legislation, it is be-
lieved, is destined to be confronted
with numerous amendments on its way
through the National Legislature. The
chief objection thus far voiced in real
estate and mortgage circles is against
the exclusion of homes above the $lO,-
600 class from the mortgage benefits
provided in the measure. This fea-
ture of the bill, some feel, may have
tendency to revise downward the value
OF homes just above the $4,000 group.
While there is considerable agitation
for an increase in the limitation to
$4,000, it is felt in congressional
quarters that compromise on $4,000
will be reached.
1t was estimated before committee
hearings at the Capitol this week that
The $4,000 limitation Would include
three quarters OF the owner-occupied
homes Of the country (about 8,000,-
Coo homes. while extension of the
limit to $4,000 would add 100000
more, and a $4,000 limit would take
in 100000, or nearly ALL owner
orcIlDied homes
In this connection, Horace Russell.
general counsel for the Home Loan
Bank Board, raised the question
whether the Government would be able
to raise enough money to finance all
the homes, and also whether the Gov
eminent should undertake first to pro-
tect the small home owner and leave
the larger home owners, which constl-
tute a more wealthy and independent
class, to their private resources.
Reduced to simple terms, the Roose-
would operate in this manner: The
owner of $4,000 dwelling, for example,
has a mortgage of $4,000 on his home,
with interest at 6 per cent, and he is
unable to meet the obligation. Either
the home owner or the mortgage would
approach the Home Owners Loan Board
Offices for refinancing.
In exchange for the mortgage, the
mortgage would accept bonds issued
by the board on which the Government
guarantees interest Of per cent. The
Tefinancing plan imposes upon certain
mortgages the necessity of adopting
liberal, cooperative attitude concerning
the remainder of their security over
and above what the Government is will
ing to finance on a first mortgage. In
return for certain interest, then, the
mortgage in this hypothetical case may
agree to mark down the debt to 5000.
The Federal Home Owners Loan
Board would then issue new mortgage
with face value of $4,000, payable by
the home owners in Is years at 5 per
cent interest. In addition, the corpora
tion may advance the home owner cash
for the payment of taxes and necessary
repairs to the property, and cover it in
the mortgage.
Moratorium Possible.
The Presidents plan would give the
the newly created Federal agency au-
thority at its discretion to grant
three-year moratorium on the debt.
The S2,000,0 100000 capital contem-
plated for the refinancing plan would
be raised by the Government through
the setting up of Federal savings and
loan associations which would be men,
bers of the Federal Home Loan Bank
system. Established only where the
Federal Home Owners Loan Board
finds existing sa".ngs facilities INSULT
cient, these associations would attract
depositors seeking safety for their saw
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