Evening star., 1933-10-18
HOME LOAN BONDS
TRADE FOR TRUSTS
0.K.'DBY TREASURY
Ban on Exchange of Former
for Latter by Closed Banks
Is Removed.
MARKET is HELD BETTER
FOR CORPORATION PAPER
Mortgages Finding Few Buyers,
Conservators Report, in Urging
Nav Policy.

The Treasury Department today re-
scinded its order forbiddins conserva-
tors in closed national banks from &C
cepting bonds of the Home Owners
Loan Corporation in exchange for mort
cages held by them.
In communication directed to
Chairman William F. Stevenson Of the
Federal Home Loan Bank Board, Con-
troller of the Currency O'Connor said
his Office has been getting a rather
positive reaction from conservators, in
dicating that in their opinion it would
be for the best interest of their con-
servatorships in many instances to ex-
change their mortgage assets for the
Home Owners Loan Corporation bonds. "
The announcement followed the
revelation yesterday that although re-
ceivers in closed banks had been given
leeway to consider such exchanges, con-
servators were under definite instruc-
tionS not to accept bonds. This had
resulted in many distressed home
owners being unable to save their
homes from foreclosure through the
Home Owners Loan Corporation.
Bonds Find Markets.
OI,onnor pointed out that conserva-
tors report that Que to present eco
nomio conditions an abnormally large
numbee of mortgages have accumu-
lated and that the overhead expense
NEuived in servicing them tends to
mount up into substantial proportions.
Conservators take the position. he
said. that in view of this situation and
of the further fact that market is
being established for the bonds, while
the market for the mortgages is abb
normally slow. ''it would be advisable
to adopt at this time general policy
of permitting conServatOrS to exchange
their mortgages for bonds where under
the circumstances Of the particular
case such course seems to be to the
advantage of the cCnServatorship.
Bonds OF the Home Owners Loan
Corporation will be issued in denOmina-
tions as low as S25 and will be on the
market early next month. the Federal
Home Loan Bank Board said earlier in
the day.
In view of the fact that the bonds
will be accepted by the Home Owners
Loan Corporation at face value in pay
rlent of Indebtedness due it, officials
pointed out this decision will enable
home owners of small means to acquire
them at current market prices and ef-
feet a considerable saving in discharg-
ing their obligations to the corporation.
The bonds were quoted yesterday on
the New York Real Estate Exchange,
where they are being sold on when
issue" basis, at 861a
Means Federal Saving.
ThosGovernment also effects a saving
when the bonds are rendered in pay
ment of indebtedness, it was pointed
out. since the corporation is then able
to retire the bonds, on which it guaran-
tees 4 per cent interest
Close to $180,000,O00 worth of loans
have been approved by the Home Own
ers' Loan Corporation throughout the
United States to date, it was said at the
Federal headquarters. and a large per-
tentage of this amount will be repre-
sented in the bonds of the corporation
Decision as to where the bonds will
be listed has not been reached, but the
Real Estate Exchange and New York
Stock Exchange we're mentioned.