Evening star., 1933-10-03
Home Loan System Is
Untrue to N. II. A. Spirit

AO tuc EoltOr Oh Inc 6thI.
For whose benefit was the home loan
act passed? Several years ago Mr..
Hoover was urged and begged to get
bin passed to help home owners like
Yarn owners, to sell all the Government
bonds necessary at 3 to 3 per cent,
payable in Is years. and loan to any
home owner up to 80 per cent Of low
depression values and thus put secured
money into circulation all over the
United States and create such an enor-
nous business millions would be put
to work in every trade.
Not only stop foreclosures but enable
people to buy homes, improve homes,
buy furniture, comforts and luxuries
by loaninr at 8 to 4 per cent interest.
Mr.. Hoover signed q bill to loan to
the building and loan associations 50
they could make . profit on distressed
home owners.
President Roosevelt asked for "legis-
lation to protect the small home owners
from foreclosure and to relieve them Of
portion Of the burden Of excessive
interest" 8 per cent
He asked for bread and they gave him
stone.
Here is how the act Of 1888 works
out:
A bought an $4,000 home in 1928, pay
ing part cash, part monthly, and as
Stunning first trust Of $4,000 at 6 per
cent.
He makes improvements and tax ap-
praisal is raised to $4,000. The crash
comes, work cut. pay cut; no cut in
taxes. water. light. gas. phone or neces-
sites. He applies for a loan to meet
overdue trust and Is told
If the trust holder will not take bonds
without definite value, paying per
cent, we can only loan you 40 per cent
on present foreclosure value Of $4,000,
6 per cent interest-$2 400 will not pay
So, 200 with accrued interest and taxes
and more than 500 costs charged in
some States"
But, listen, If his home Is fully paid
for and In no danger the home loan
bank will loan him so per cent at only
per cent interest.
The law reads: THE obligation must
and the loan cannot exceed the present
lien Indebtedness" Contradictory!
The chairman Of the Federal Home
Loan Bank Board states that II the
mortgage refuses to exchange q we'll
secured per cent security for 4 per
cent unsecured bonds OF questionable
value he tries to induce them to accept
exchange by saying:
But are you getting per cent?
Wouldn't you be better on with 4 per
cent security on which you are sure Of
getting your INTEREST,""
The mortgage can reply: II can
foreclose and get all my money and
interest. so why should give away 20
per cent Of my money and let you
charge the home owner per cent and
all costs on that 40 per cent I may lose.
Would I not be giving the bang that
20 per cent? Would the home owner
save any interest? If the law was
made to help home owners why not help
them instead Of spending millions in
salaries on nice political jobs?"
Untold millions now being given in
charity. Home loans are well secured
and will be paid in full with interest.
That law provides a severe penalty for
overappraisal. but none for underap-
praisal. which does the home owner an
injustice and decreases the market value
OF the property. II loan Is refused,
makes 1t impossible for owner to secure
loan elsewhere or to sell near value.
The appraisal should not be less than
the tax appraisal. which is considered
IS per cent of sales value
The Home Loan Administration ap-
pears pessimistic and is not conforming
to the N. r. A. spirit. The United
States needs 10 million home owners.
Confiscatory taxes should be outlawed.
1t is cheaper to rent than to own
property with mortgages at per cent
and up, high taxes, assessments. upkeep,
etc. and especially when local condi-
tions become unbearable
MRS. JOHN AYLETT NICOL.