Evening star., 1934-01-19
Guarantee of Home Loans
Viewed With Friendly Ewes

Announcement from the White House
that the Government will seek the bene-
fits of guarantee of the principal of
home loan bonds, in addition to the sup
port OF interest payments, is received
with friendly comments. 1t Is recog-
nized that the project increases the po-
tential public debt, but it Is pointed out
that a vast amount of property lies
behind these obligations and that the
creation of liquid assets by the guaran-
tee route will benefit the country gen.
orally.
1T is far more progressive and as
slsting measure than may appear on
the surface" declares the Charlotte OBJ
server, recalling that difficulties have
arisen because Of the attitude of those
holding first mortgage papers, insurance
companies, bond houses, building and
lean associations and private concerns" :"
The Observer concludes as to the pres
ent move: 1T means that the Federal
Government will take the first lien on
such distressed properties of the hands
OF those individuals and concerns now
holding them and who feel it obligatory,
In the interest of their investors, to
press for foreclosure. The eventual i'm
pllcationS Of such a move are of vital
concern to multiplied thousands OF the
American home and farm owners who
nave been facing no alternative other
than allow their creditors to take their
properties in lieu of debts"
THE Government guarantee" says
the Cleveland News, will apply to the
entire issue of $4,000, 900 900 which the
Home Owners Loan Corporation Is au-
thorized to apply toward lifting mort
cages on private homes. It will mean
ready cash for depositors, the easing of
the debt burden on wage earners whose
homes are threatened It will enable
the Loan Corporation to pay back some
OF its borrowings from the r. F. C. and
the latter institution to reloan this
money for other causes"
The bonds were for the purpose of
relieving banks and other institutions"
according to the Hartford Times, "of
8 load of frozen credit, while relieving
also the distressed mortgagors, for
whose mortgages the bonds were to be
exchanged. The agencies Of this extern
sion OF Federal credit are in form pri-
vate, but in substance governmental,
because the Federal Government sup
piled the financing required originally.
II the bonds are to become really liquid
assets in the hands of the holders.
required, in view of present conditions.
II Will increase the contingent public
debt. unfortunately, but there is large
value in the mortgages, most of which
ultimately should be paid and redeemed
at somewhere nearly the face figures"
Z 1t Is fact" records the Port Huron
Times Herald, that the absence of Gov
ernment guarantee of its own bonds has
been seriously handicapping the prog
ress Of the farm and home mortgage
relief enterprise in accomplishing the
desired relief In many cases where It Is
very much needed. Certainly, any Sc
curities issued by or under the authority
OF the Government ought to be guaran-
teed by that Government, even If there
Is good property security, which is pre-
sumed to give them value. Even pri-
vate bond houses used to guarantee
the securities they underworld. A Gov
ernment bond Of any sort which Is not.
guaranteed IS curious sort Of
anomaly"
Observing that the Home Owners
Loan Corporation "is beginning to
function on wholesale rather than
retail scale" the Philadelphia Evening
Bulletin calls 1t rescue work." and
AYERS that "the home-saving agency is
Chroni' feels that while q guarantee
Of the .incipal Of the bonds seems to be
good business for the Government, 1t
most assuredly would speed the re-
financing Of farms and homes, and
bring relief to thousands Of families
which otherwise would lose all they
have" The Newark Evening News ad-
vises that sound reason supports the
project" and 1T is the one action
needed to assure realization Of worthy
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