Evening star., 1933-12-06
EARLY MORTGAGE
RELIEF PROMISED
King Sees Quick Action by
Congress in Correcting
Some D. c. Evils.

With non-co-operating mortgage
holders under fire from both the local
and Federal Offices of the Home Own
ers' Loan Corporation. promise of quick
action by Congress after the first Of
the year to correct some of the evils of
the District foreclosure laws was prom
ised today by Chairman King Of the
Senate District Committee.
Principal objectives of the committee
he said, will be to enact legislation to
provide for a redemption period in all
foreclosure cases, and to require court
approval of all auction sales of property
in default.
Maximum Redemption Seen.
Belief was expressed in Home Owners
Loan Corporation circles that Congress
may effect maximum redemption Pc
riods here in view Of reports to the Fed
eral office that more difficulty is being
experienced here in saving homes than
anywhere else in the country. The
District is one of the few jurisdictions
where it is possible to sell property at
auction without court authorization.
Possibility of moratorium on all
foreclosures here was expressed by one
Official.
Immediately following the criticism
Monday by John F. Fahey, chairman
of the Home Owners Loan Corporation
Of non-co-operating mortgage holders in
the District, Paul j. Frizzell. manager
of the Washington branch, launched a
vigorous attack on "misinformed" ele-
ment which is hampering the giving OF
Federal aid to distressed home owners
The difficulty in contracting the actual
holders of first mortgage notes here. he
said, is contributing factor to delays
and failure to effect loans. A decision
is now pending in District Supreme
Court in a case where the corporation
sought to compel a finance company tu
reveal the name of the holder of first
mortgage notes.
Unlike the majority of the cities
throughout the country" he said. first
mortgages on homes in Washington are
largely held by individual investors
who have purchased. them from real
estate firms or mortgage companies and
who, as a result, never come in direct
contact with the home owner or his
problems"
Loans Turned Down.
Frizell said his Office had many cases
where preliminary examination has
convinced them that a loan can and
should be made. but have been turned
down by the note holders in efforts to
exchange the notes for the 4 per cert
interest-guaranteed bonds of the Home
Owners Loan CORPORATION.
I'm contrast with this" he said, "the
large insurance companies of the coun-
try are cooperating with this corpora
ton to the limit of their ability by ac-
cepting bonds in worth cases"
The market price" of the bonds,
Frizzell said. should not be taken as a
basis for their value. 1T seems equally
as absurd to value these bonds on the
basis of the market price as it would
be to consider first mortgage on a
Washington home as having no value,
simply because banks generally will not
accept them as collateral. and because
there is no ready market for their sale. "
Frizzell said only one of the larger
building associations here and one of
the smaller ones will, accept the bonds.
This, he said, Is explained by several
instances which have come to his at
tention where officials of building asso-
Citations have been notified by their de-
positors that should their association
give its consent to accepting the bonds,
the depositors would withdraw their
funds, -