Evening star., 1934-08-14
BANKS SUPPORT
HOUS|NGPROGRAM
0'Connor Approves Plan to
Let National Houses Par
ticipate in Project.
BY the Associated Press.

By the Associated Press.
J.F. T. O'Connor, controller of the
currency, today approved plan de-
signed to facilitate the making of
Government-insured loans to prop
erty owners for alterations, repairs
and improvements.
In an interview regarding his de-
partment'S attitude toward the loans
now being made under the Federal
Housing Administration, O'Connor
said:
There has been approved a plan
whereby national banks may purchase
participating interest in loans repre-
senting advances to property owners
for the purpose Of making alterations,
repairs and Improvements to real
property, which loans are insured un-
der title Of the national housing act. Z"
Represent $4,000, 600, 600 Capital.
The controllers statement coincided
with an announcement by the Housing
Administration that it expected to
have lending facilities available by the
end of the week in every community
OF the Nation. Financial institutions
with assets of almost $4,000, 900 900
have been authorized thus far to ex-
tend credit for home modernization.
Further explaining the group loan
plan, O'Connor said:
Such loans are made by or pur-
chased by corporation acting as
trustee for the participating banks,
such trustee having made application
and been approved by the Federal
housing administrator for the credit
insurance under the provisions of sec
ton Of the national housing act.
Since loans which are held in
trust by the trustee are insured up to
20 per cent by the housing admin
istrator, participating certificates in
such loans will not be classified by ex-
aminers as slow. doubtful or loss until
the losses exceed the 20 per cent of
the insurance.
Books to Be Open TO All.
"Under the plan, the books of the
trustee are open at all times for ex-
animation and inspection by the bank
examiners and participating banks"
The controller said that, with re-
spect to the direct acquisition by ma
tional banks OF notes representing ad-
vances to property owners, he had
advised the housing administrator as
follows:
THE making of loans of this type
by national banks is a matter of in
ternal business administration to be
determined by each bank.
Because of the insurance provided
for loans of this type, national bank
examiners will be instructed that such
loans need not be classified as slow,
doubtful, or loss so long as a suffl-
cient insurance reserve exists to cover
them"
O'Connor has invited James A.
Moffett. the housing administrator, to
confer with chief bank examiners at
a meeting here September 10.
Telegrams Piled High.
kilograms from bankers accepting
the insurance plans for moderniza-
tion loans piled high at the Housing
Administration today. Officials pre-
dicted the plan outlined by O'Connor
for national banks to participate in
the loans through corporations acting
as trustees would give additional i'm
petus to the program
In the Housing Administration an
nouncement Roger Stefan. director of
modernization credits, said he ex-
pected by tonight to have at least
one bank in every city where prop
erty owners can obtain insured loans
for rnnQi Qirc and ironr0uapanpfe
The Housing Administration said
that already modernization loans were
being made in many communities.