Evening star., 1933-04-14
The Home Mortgage Bill.

President Roosevelt has sent to the
Congress his home mortgage bill, q
companion piece to the earlier farm
mortgage bill which has just been passed
by the House and which will soon be
acted upon by the Senate. In con-
siderable measure the proposal for aid
to the owners Of small homes is in
line with that TO aid the owners OF
mortgaged farms For example, the
new bill would set up corporation,
Home Owners Lean Corporation. under
the FeGeral Hcme Loan Bank Board,
with $2,000,000 900 at its disposal to
refinance mortgages on homes valued
at $4,000 or less. The new corporation
will be authorized to issue bonds up
to the two billion dollar mark for the
reflnancing Of the home mortgages. AS
in the case of the plan for the aid Of
owners of mortsaged farms, bonds Will
be substituted for the mortgages by this
Government agency, with the holders
OF the mortgages accepting the bonds
as substitutes and the Home Owners
Loan Corporation accepting new
mortgages on the homes.
The clear purpose of the bill is to
make 1t possible for the owners OF
small homes to meet a crushing burden
which now Is making 1t impossible for
them to keep their homes. Under the
Roosevelt plan the holders of mort
cages Cn these homes would be benefit
ed also, since they would obtain bonds,
ON which the interest Is to be guaran-
teed by the Government and which 1t
is believed would have ready market
in case the present mortgage owner
wished to realize cash on them. The
interest en- the bonds would be four
per cent while the home owners In
terest on their mortgages payable 10
the new corporation would be five per
cent. or one per cent higher than the
interest which the farmers will have to
pay on their mortgages under the new
farm mortgage bill.
President Roosevelt has aptly de-
scribed the purpose of the home mort
gage legislation in his message to the
Congress. That purpose, he said, Is TO
end the fear and despair among both
home owners and investors" The Presi-
dent urged the need Of protecting and
aiding the owners Of homes as q ma
tional policy in the interest Of the whole
people The great shrinkage In values
due to the depression and the inability
of owners OF small homes to find en-
pIoyment and therefore to meet the
payments Of interest and principal due
en- their homes are factors which have
made necessary this step by the Gov
ernment to give relief
The home owners will be given q pc
riod of fifteen years to meet the indebt-
edness on their homes, with small pay
ments made monthly, and moratorium
Of perhaps three years, If moratorium
is essential Where the Indebtedness
may In the interest OF the parties con-
cerned be scaled down, the reduction
home. The offering Of the bonds to the
mortgage holder would be up to eighty
per cent of the value OF the property.
Because Of the shrinkage Of values, that
percentage of the present value might
be less actually than the amount of the
original mortgage, it is said
The system of aid to the home own
ers is to be operated through the Home
Loan Bank Board. Under the proposed
legislation it is planned to set up sys-
tenn Of Federal savings and loan ssso-
Citations for financing home building in
communities not now provided sde-
auately with such facilities. How far
The Government should 20 along that
line. however, Is question, desirable as
it is to have a nation Of home owners.
Another serious question is involved.
II it is planned to have two billions of
bonds issued for the aid of home owners
and another two billions Of bonds for
the farm owners, and, as 1t is proposed,
four or five billions of bonds for public
works program, and all CT these bonds
are to be tax free, the already huge
total of tax-free Government bonds in
this country will be augmented by
n,arly $4,000, 900 0O0 The tsx-free
Government security has become a
menace in this country. providing as it
does an escape for vast amounts Of
wealth from taxation. 1t Is time the
Government called a halt to all such
tax exemptions.