The border vidette., 1934-05-12
$4,000 JOBS EXPECTED EROM
HOME LOAN ACT

THING IOAN AZ
Phoenjx.-John II F'ahey, chair
man of the Federal Home Loan
Bauk Board, declared ia a CON
muaica.ion sent to Acting Ari
zcna Manager Evan S. StaIlcuo,
that the legislation signed by
President Roosevelt amending
the home owners loan act would
not only help materially 10 the
rehnaucinK OF urban homes, but
woald start q 5000. 600 600 home
reconditioning program. 1t
would employ the equivalent Of
l25, 600 men for . year, be said.
Mr.. Fahey Said that the amend
ment would bring spedjer relief
for homs owners, increase the
supply of credit for home build
logs and repair. stimulate EN-
ploy ment aod give federal pro
.. section for private savings.
Mr.. Fahey in his statement
said:
Five major otjsctives aud
several minor ones are accom-
plished by this new legislation.
First Of all. the United States
government now guarantees both
principal aud interest Of the
bonds OF the Home Owners
Loan Corporation, previously
guaranteed only as to interest.
A second importans provision Of
the oct riRidly restricts loans by
the corporation to home owners
who were in voluntary default
on Jane 13. 1888, or whose de
fault at . later date has been due
TO circumstances beyond their
control.
IA third feAture OF the new
amendment. which may provide
employ ment for the equivalent
of 125 900 men for q year or
more i the authorization OF
5000 O00, 900 to be advanced BY
the Home Owners Loan Corpora
tion from its own funds for
reconditioninR homes The fund
is strictly limited TO bones on
| which the corporation makes
relief loans.
The fourth important change
| effected permits the United
States Treasury TO buy tnl!-
paid income shares in any Fed
eral savings aud loan associa
! tiou.
Fifth, the optional morato
rum for borrower from the
Home Owners Loan Corpora.
ton is now withdrawn. The
formal privilege of paying nc
installments on principal until
juno 13. 1886. has been abused
by many borrowers who were
actually able to make such pay
ments. No postpouement of
| principal payments will COW be
permitted except in necessitous
cases. Bear ia mind that the
monthly payment required for
both nriucipal and interest is
| only 81 81 for each 81, 900 Of
loan. The average monthly
payment of principal and inter
| est by the 100000 present Dor.
! rowers requires less than $23.
the average loan TO date being
$1,000.
THE amendment alao pre-.
vents the lender from exertinR.
undue pressure on the borrower
to reduce the principal Of his
loan. Since the principal Ruaran
ty became probable and the bonds
reached par. many lenders have
tried to exchange their mort
cages for the bonds in order to
gain greater liquidity.
I'm the interest of safe invest
mont of small or large personal
savings and for the restoration
Of activity ia the building trades.
no part of the new amendment
is- more vital than that which
provides for purchase OF full
paid income shares la Federal
| savings and loan associations
by the United States Treasury.
ITO illustrate what this fes.
ture of the new act means. in
making mortgage money avail
able. suppose that thrifty citizens
OF . com u unity have invested
$4,000 in the shares OF . local:
Federal savings and loan asso
citation, which may be = convert
ed state chartered building and
loan association The United
States Treasury will then be