Evening star., 1933-08-12

ton, which are guaranteed only aS
officials of the Washington agency
of the corporation stress that co-opera-
tion of mortgage holders in accepting
the bonds in exchange for notes is
necessary to stop the parade of homes
to the auction block. Mortgages eX-
press willingness to cooperate, but
they want first to know what a bond
of the Home Owners Loan Corpora
ton is worth and where market for
them exists.
Early Decision Seen.
Some decision on this point is eX-
pected shortly, since the matter has
been put up to the controller of the
currency by the building and loan as
sociations of the District. which are
being asked to accept them. These as
soclations are under the controllers
jurisdiction.
With the objectives of the home own
erS' relief act forming an integral
part of the whole recovery program,
quick Qualification of the status Of the
bonds by the administration MUST be
forthcoming to avert the social conSe-
ouences of continuing foreclosures on
home properties.
In the District of Columbia the sup
port of mortgage holders is the only
IlOpS tllt COl JOldlIOIl lldS " lldiI 1NAS-
closures until such time as the bond
problem is cleared up. unless the cases
are carried to court and postponement
ordered Under the deed of trust syS-
tenn in force here. mortgage sale
can proceed at the instance of the
parties secured and without need OF
court authorization.
Procedure Established.
Believing that the greatest degree of
cooperation between the washington
office CT the Home Owners Loan Corp
Grafton and the mortgage holders of
the city is essential TO the successful
attainment of the purposes of the leg
lslation, Charles A. Jones. manager,
and Paul Grizzell, assistant manager,
have established a set procedure for
the handling of loan applications In
that agency. 1t follows:
Applications, when received, will be
reviewed to determine if the case falls
within the limits of the act creating
the Home Owners Loan Corporation.
In this connection, it will only approve
for consideration cases where the ap-
plicant has made every reasonable ef-
fort to work out with his present mort
gagees a solution of his problem that
is within his ability to meet.
If the case is approved, the applI-
cant will be directed to secure the con-
sent of his mortgages to exchange
their notes for bonds of the corpora
ton. In the event the applicant re-
ports that he is unsuccessful, 1t tlen
becomes the duty of the agency to Sc
cure the necessary consents.
Check Risk Justification.
When the necessary mortgage cen
sents are received, an investigation
of the character and record of the
applicant will be made to determine
if the moral risk is such as to justify
q lean.
Appraisals (Which are being made
by Independent appraisers and con-
flrmed by the management of the Of
fice) Will not be made until the pre-
ceding steps have been taken.
A pamphlet giving complete informa-
ton concerning the bonds is almost
ready for publication. 1t contains. in
addition to other information, the fol-
lowing:
The bonds of the Home Owners
Loan Corporation have been made ac-
ceptable, at par, as security for tha
deposit of public moneys. A recent
circular of the Treasury made this
announcement. In other words bank
which desires to secure Government
deposits may use the bonds of the
Home Owners Loan Corporation as Sc
curity for such deposits.
These bonds may be accepted also
by Federal Reserve Banks as collateral
security for advances made to member
banks under the conditions prescribed
by section lob of the Federal reserve
act as amended.
"The Reconstruction Finance Corpo-
ration has agreed to accept the bonds
of the Home Owners Loan Corpora
ton as collateral for loans up to 80
per cent of their face value. For in
stance, a building and loan associa-
tion, or the receiver for closed bank,
may now have mortgages of say 100000
up as collateral for loan OF 100000.