Evening star., 1934-08-16
MOFFETT SPEAKS
ONHOUS|NG PLANS
Declares Profiteering Will
Be Exposed Immediately,
. In Forum Address.

A rise in the price of building ma
terials may be expected as q result
Of the Governments new housing
fnodernization program, but profteer-
ing wfl be exposed Immediately by
the Federal Housing Administration.
James A. Moffett, the housing ad-
sninistrator, made that declaration
last night in an address in the Ma
tional Radio Forum, arranged by The
washington Star and broadcast over
q cosst-to-coast network Of the Ma
tional BroadcastinR Co. The address
was heard locally from Station WRC,
"On the other hand" Moffett said,
Eve shall not lend ourselves to any
drive to force industries to chisel on
their wages or 60 bankrupt. Our po-
sition Is simply that fair prices must
be fair to both the producer and
the consumer"
Explains Operation.
Mofett explained the method OF
Aperation Of the national housing act
and summarized his present duties as
encouraging and insuring character
loans" of from $10o to 1000 each to
finance repairs and improvements for
homes and other property. He also
said banks serving q territory IN
which $1,000. 900 people live already
have accepted contracts to make such
loans.
The housing administrator empha-
sized that his organization would not
stop with the modernization program.
but would endeavor ito give the
home financing system thorough
overhauling with the long-term amor
tized mortgage at low interest to be-
come the standard practice"
Explaining the plan to establish a
new type of mortgage association or
company, Moffett said THE National
MortFaTe Associations are designed 10
provide the missing channel to con-
meet the supply with the demand"
To BE No Overborrowing.
Moffett also stressed the fact that
there is no intention on the part OF
the administration to have the public
overborrow.
"Our program will be no expert
Ynent." he said, "Great Britain affords
us n rood example Of what can be
done. Since 1922, that country has
constructed approximately 2,5oo 900
homes, and this year will construct
between 800 900 and 100000. Contrast
this experience with drop Of 90 per
cent In our own home-build1ng
activity.
The text of the address follows:
The National Radio Forum has In
eited me to talk to you this evening
about the work of the Federal Housing
Administration, and I am happy to
have the opportunity.
Your representatives in Congress, In
nassing the national housing act OF
June 81, 1884, authorized great un-
dertaking, and President Roosevelt has
commissioned me to administer the act.
The program assigned to us Is a
straight business proposition, TO be
financed almost wholly out of savings
deposits and other funds in the hands
Of private lending institutions.
The primary purpose OF Part is to
create credit for character loans
through the means of Government in
surance to financial Institutions. There
A no thought or intention of having
the public overborrow.
To Loosen Frozen Credits.
Under Parts II and III the aims
are TO loosen up frozen credits in the
form Of existing mortgages, to make
funds available for new-home con-
struction and to give our home financ-
ing system a thorough overhauling,
with the lons-term amortized mort
gage ut low interest to become the
standard practice. All this is to be
accomplished through the medium OF
q mutual mortgage insurance program
supervised by the Government and
through the creation and operation of
privately financed national mortgage
associations over which We shall exer-
else close supervision.
In order to accomplish even q
small part Of the task, the active help
and support of property owners, busi-
ness men and bankers throughout the
United States will be required. The
extent Of their cooperation will deter
mine the benefits to be felt by the
entire American people.
Taking up the provisions Of the act
In greater detail. Title I gives us the
responsibility Of insuring commercial,
savings and industrial banks, trust
companies, building and loan associa-
tions. installment lending companies
and other financial institutions against
rv,l.f .fnA ivan
suit Of making loans to pay for altera-
tions. repairs and improvements on
homes and other properties.
Coed Character Required.
This should enable any property
owner who wishes to install q new
roof or new plumbing or to add room
or paint the woodwork, to 20 to a
financial institution and borrow what
ever funds may be necessary. The
principal condition Is that he must be
Of good character and be in a position
to pay back the loan in regular in
stallmentS.
The very great majority Of borrowers
can and do pay off such loans accord
ing to their contract.
In order to make such credit gen.
orally available, our plan insures the
banks against losses up TO 20 per cent
of the total amount of the moderniZ-
ing credits which they extend In ac-
cordsnce with our regulations. There
also Is provided in the act q liquidity
feature as q protection to the finan-
elal institutions in the event OF
emergency.
The emphasis Is on character loans,
which do not require Endorsements or
the posting of collateral or the taking
cut or increasing of mortgage. When