The Washington times., 1934-05-05

ing its present
= shortage of two
Olck S"AeE members, tn e
authority will hold its organiza-
ton meeting Monday in Chicago
and our local light, H. Clifford
Bangs, will leave for the Windy
City today to be on hand for the
first meeting.
The first meetings will be de-
voted to outlining the detailed
organizations-regional, State and
local authorities must be set
I'D to insure far-reaching action
toward recovery.
This accomplished, the group
will then prepare plans for the
registration of every broker OF
real estate in the country. The
task will require several months
and will be second in Importance
only to that of enforcing com"
pliance.
Realtor Bangs will return to
Washington as soon as possible,
however, for he is to address
the Virginia State Association OF
Real Estate Boards on May IL
at the harrington Country Club.
OF course his topic will be the
code.
Now that the general public is
beginning to realize just what
the Home Loan Bank Board is
doing in the matter Of relief
in distress cases, the chiselers
are beginning to operate just as
though the board were a great
big Santa Claus.
Chairman John H. Fahey, Of
the Home Loan Bank Board and
its emergency subsidiary, the
Home Owners Loan Corporation,
has let out a gentle hint, how
ever. to the effect that he knows
chiseling is going on, and warn
ing that it will not get very
far.
OF the 1926 ,O00-odd loan ap-
p1ications made, literally thouS-
andS have been rejected because
it has been found that the debt
ors were well able to keep up
their present payments, Mr.
Fahey said, or else they could
refinance through private sources.
They chose to make applica-
tion for relief because of the
benefits of the long-term amorti-
Zation and the low interest cost
provided, he declared.
In many instances, the debtors
have deliberately defaulted to
lead their creditors into such
action as would predicate filing
of an application. Moreover, the
corporation has discovered in
disputable cases where debtor
and creditor have actually en-
tered into collusion to obtain
the Government financing.
To eliminate such abuses and
to expedite the relief work in
cases of genuine distress, the
amended home loan act has laid
down the rigid section two
which restricts the type of mort
gage the corporation may refi-
nance. In part, the section
reads:
mo home mortgage or other
obligation or lien shall be &C
Quired by the corporation un-
der subsection (d), and no
cash advance shall be made
under subsection ~ unless the
applicant was in voluntary de-
fault on June 13, 1888, with
respect to the indebtedness on
his real estate and is unable
to carry on or refund his pres
ent mortgage Indebtedness"
Under this amendment lenders
can accomplish nothing towards
liouidating their liens by ex-
change for Home Owners Loan
Corporation bonds through u1-
duly pressing their mortgagors,
Mr.. Fahey says. On the other
hand, it will now be disastrous
to their credit standing for those
who are not in difficulty to dis
continue payments and present
an appearance Of distress in
order to get a 5 per cent long
term mortgage.
With some Of his letters still in
the mails. that QUESTIONABLE sent
out by Frank J. Luchs to get the
general reaction of the country on
HOLC and it's effect on foreclos.
ures, is beginning to click.
Already more than so responses
have been received by Mr.. Luchs,
some coming from as far west as
Lincoln, Neb., and as far south as
Dallas, Texas.
Not one Of them failed to affirm
the desirability Of the Hole plan.
Most Of them averred that apprais-
ais are normal and many COM
planned that appraisers are not
competent. This latter condition
is being remedied and improved, it
was invariably stated in qualifica-
ton.
Several of the answers to the
question as to what better plan
could be suggested referred to the