Evening star., 1933-07-22

corporation can make its cash reso
owners whose membranes do not
value Of the property, it is pointed
from the corporation for the OWL
per cent Of his property's value un
accept the bonds.
The objection voiced in financial cir
kles regarding the bonds is that they
are not guaranteed by the Government,
except as to interest, which is assured
ut 4 per cent for 18 years. Despite
the objection, officials Of the Home
Loan Bank Board, Of which the Home
sidiary, predict the bonds will be quick
" absorbed as soon as they are made
available, which Will be In the near
future.
Deflsults Five Billions.
OF the more than $21 900, ,000, 900 in
mortgages held on homes in the United
States, 1t has been estimated that ap-
proximately $1,000, 100000 may be in
default. The Government, therefore,
could not hope to assist in every in
stance; nor does it expect to, since its
relief will be available only when funds
for such aid absolutely are lacking
from any other source. The capital of
the Home owners Loan Corporation
CO0lSleCS VI |lVV,VUV,uVu ouooSi1D0u Wy
the Treasury and authority to issue
$4,000, ,000, 900 in bonds.
Charles A. Jones, the District Of CO.
fumbia manager for the corporation,
pointed out today for the benefit Of
Washington home owners that the cor
poration Is in no sense simply re-
financing organization. Cases have
come to his attention, he said, where
home owners paying or 612 per cent
interest on their mortgage wished to
refinance through the corporation just
to have the benefit Of its per cent in
terest arrangement, although their
homes were not in danger of being con-
dscated. Such applications are promptly
rejected. The relief Is for distressed
home owners only, he asserted.
Referring to the complication Of re-
fusal by mortgages to accept the
bonds, the loan regulations issued by
the corporation point out:
I'm cases where the lender is unable
or unwilling to accept bonds for the
mortgage, managers are directed to
make every effort to induce the mort
gagee or lender to carry the home
owner on some reasonable basis. and
If this cannot be done, to assist the
home owner in procuring funds else
where, If possible. In ordinary chan
ueiS IL tlS - AuPoooAuc' oAio VIC
home Is about to be lost, the manager
is directed to proceed with the appli-
cation for q cash loan as elsewhere
herein provided, If, in his judgment, 1t
is within the act Managers and the
public are reminded, however, that
5000, ,00O, 600 Of cash cannot take up
$50, ,00O, 900 900 Of mortgages, and this
cash therefore Is to be used only In q
limited way, so as to relieve the great
est distress
Cash Relief Limited.
The regulations point out in another
section that state managers are in
structed not to recommend the taking
up of mortgages or other obligations on
homes in cash except in cases OF real
distress, where the home Is In danger
and where the home owner Is actually
unable to obtain the funds elsewhere,
and then not exceeding 40 per cent OF
the value Of the property In question"
Essentials Of the act, briefly, are as
follows:
Those eligible for aid are home own
ers who actually are In distress. Loans
are limited to buildings housing four
families or less and valued by the
Home Owners Loan Corporation ap-
praisers at not more than $4,000. The
building should be the home Of the
owner, although the corporation has
limited discretion In certain cases
where the owner Is not an actual occu-
pant.
Loans tn the form Of bonds plus q
small amount Of cash may be as high
q so per cent Of the present value OF
the property, but IN no case to exceed
80 Per Cent Limit Set.
Where the existing mortgage Is Tor
feus than 80 per cent Of the value OF
the property, the corporation has the
right to advance cash for the payment
81 taxes, assessments and repairs, but
in no case may the bonds and cash
together exceed 80 per cent OF the ap-
praised value Of the property. Tne
bonds which the mortgage VIII be
mortgage which he holds will be ex-
empted from all taxes except surtaxes.
estate. inheritance and gift taxes.
In cases where the mortgage agrees
to accept the corporations bonds IN
exchange for the mortgage, the nome
owner paws interest at the rate OF 5
Der cent to the corporation. In the
few cases where up to 40 per cent
cash is allowed, the interest rate Is
nxed at 6 per cent.
with respect to unencumbered prop
erty, there Is provision IN the law
which provides for cash loans for the
payment of taxes, assessments ana
needed repairs, such loans not to ex-
ceed so per cent OF the value OF the
property.
while not creating q general mora
torium on Indebtedness, the act pro-
yides that where the corporation takes
over an existing mortgage the owner
can be relieved of making any pay
ments on principal for period OF three
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