Evening star., 1934-08-10
Home Owners Aided By
Housing Administration
To the Editor of The Star:

! To the Editor OF The Star:
In addition to its cosmopolitan
character, The Washington Star is
conceded by all to be pre-e minently
home" paper. I would venture to
state that there are very few homes
within a radius of IS miles of the
District that do not subscribe to The
Star Therefore, in addition to the
beneficent better homes campaign
now being conducted by The Star,
allow me to bring, with a different
viewpoint. to the attention of the
thousands Of small home owners a par
ticular feature of the national housing
act. The national housing act was
the last emergency act passed by Con-
gress, and in the opinion of those who
have read the act, will do more to
speed recovery, aid employment and
loosen credit than any of the many
emergency measures.
With many years experience in the
| mortgage business-dealing directly
with home owners-I know the Fed
| eral Housing Administration, now be-
/ ginning TO function, will prove a great
direct boon to small borrowers. Hith-
erto, home owner in need of a small
loan for repairing had to pay all sorts
OF practically exorbitant, but neces-
sary, charges. Over 80 per cent of
home owners had first mortgage on
their property. A majority of these
had second mortgage. To negotiate
loan of, say, $500, the borrower, in
the past, had to pay per cent or 8
per cent on his note, an appraisal fee,
cost OF preparing note and deed, no
tary fees, recorders fees and cost of
| title search. If the note was a second
mortgage, the broker got his commits
sion; the purchaser of the note (ow-
ing to supposed risk) would want at
least 10 per cent discount. Conse-
quently, the home owner to get $500
net for urgent repairs would prob
ably have to make out his note for
$400. Or if he made out his note
Tor $500, he would get not much more
than 5000. Interest, of course, would
De on the full amount of the note.
every home owner who has been
through this can vouch for it.
Now, what a boon the Housing Ad-
ministration will be to the millions
owning homes. Desiring a small loan
! tllmit $4,000 for actual repairs. if
the owner has a good character rat
ing and indicates ability to repay lin
small inStallments), he will 20 to an
approved lending institution or bank.
mat agency will make him the loan
at nominal rate of interest; there
VIII be no exorbitant fees. The ap-
proved lending agency gets the note
insured through the Housing Admin
lstration. The administration guar
anteeS the lending agency up to 20
per cent of its losses. There should
not be one total loss out of ten such
loans. This insured paper automati-
caily is made good collateral and Sc
curity.
Making it simple and inexpensive
Tor the home owner to secure repairs
ana modernization, loans will con-
sequently put thousands of carpenters
and mechanics back to work, 1t will
materially aid building and allied
trades and dealers in all building sup
/ plies.
And as your Mr.. Paul MalIon. IN
MS admirable column of August 8
| says: If you make an investigation
you will find that the banks have to-
day about $4,000, ,0oo, 900 of stagnant
money they could lend. In addition
there is yet about one billion in actual
] boarding, in safety deposit boxes and
socks"
And the Federal Housing Admins
tration viii see that this money gets
into circulation. It's the one thing
needed to restore the confidence of
the Nation. So let's go!
S. M. BARRETT.