Evening star., 1933-09-30
CONGRESS To ACT
FORFORECL0SURES
REGULATION HERE
Bill Being Drafted to Safe
Guard Homes, as Recon-
mended by Committee.
MAY REQUIRE DECREE
BY D. c. SUPREME COURT
Among Few Cities Where Default
Brings Auctioneer Without
Legal Ceremony.
BY VINCENT TUTCHING.


Effors to enact into law one of the
principal recommendations of the Sem
ate Rent Investigating Subcommittee
of the last Congress-the regulation OF
foreclosures of mortgages and deeds OF
trust-are expected to be made as soon
as the next session Of the National Leg
islature gets under way.
The District of Columbia is one Of
the few jurisdictions in the United
States wherein a foreclosure proceeding
may be instituted without authorization
by court.
Here in Washington. it is simply
necessary for a default to occur and
the trustees may be called upon to
summon the auctioneer to dispose OF
the property.
No Redemption Period.
Moreover, there is no redemption
period provided by District law, and
once the auctioneers hammer descends,
the home owners equity, whatever it
may be, is gone forever, even though
he may be in a position few weeks
later to make up his tagging payments,
and thus save his home.
These conditions were severely criti-
cized by Senator Cappers Rent Com
mittee, which pointed out that the
lack of proper and sufficient legal safe
guards has nurtured summary fore
closures, vast losses to investors in real
estate securities, and other evils.
LEGISLATION is now being drafted, 1t is
understood. which would correct these
so-called evils. The bill probably will
be modelled along the lines of meas
ure passed by the Senate in June of last
year, but never enacted into law. This
bill required that a decree must issue
from the District Supreme Court in a
foreclosure proceeding before any sale
of real estate to satisfy mortgage or
deed of trust.
Reasonable Period Asked.
A reasonable period of redemption
also was called for in this bill. 1t pro-
vided for the issuance of an inter-
locutory order by the court after case
for foreclosure had been proved, but
the final decree ordering the sale would
not be entered until three months after
issuance of the temporary order. In
the meantime, the home owner would
be given opportunity to pay the amount
due on the mortgage, plus interest and
reasonable charges. in which case he
would redeem his property
Real estate men insist. however. that
in the drafting Of any such legislation
every e11OrI De mace not 10 llcIease
the cost of foreclosure proceedings,
since, they maintain, this will react in
the end on the property owner.
A precedent in this direction is un-
derstood to be contemplated in the
deed of trust form being drafted for
the Washington agency of the Home
Owners Loan Corporation. The cor
poration is represented as feeling that
in Justice to the home purchaser he
should be given an opportunity to re-
claim his home after foreclosure, and
dor this reason the corporation is advo-
eating a redemption clause in its deed
of trust.
In the Home owners Loan Corpora
ton, too, there is for the first time a
group of disinterested authorities in the
real estate and home financing field
to whom legislators can turn for advice
and counsel in the drafting of bills
affecting this business.
From the standpoint of those in the
mortgage business it is felt that any
long redemption period would retard
buying at auction sales and thereby
react to the disadvantage of investors.
Mowever, they see no objection to go
or 80 day redemption period.