Evening star., 1934-12-10
SHORT MORTGAGE
PROCEDURE URGED
Slow Foreclosure Methods
of States Held at Odds
With U. S. Act.
BY EDWARD C. STONE.

BIZ EDWAhD y. SlONE.
State legislation to make mortgage
loans easier and to shorten fore |
closure procedure is seen by Frank |
Watson, assistant general counsel OF
the Federal Housing Administration. |
as necessary to the success of the |
recent Federal action to stabilize the |
mortgage market.
Writing In the December issue Of |
State Government, official magazine |
Of the American Legislators Associ-
alton, Mr. Watson points out two |
major conflicts between existing State |
laws on mortgages and the national |
housing act passed in June, 1884.
Valuation Limits Vary.
I. The national housing act. which |
provides for insurance of mortgages |
and aims to eliminate second mort |
cages, encourages single liens up to |
80 per cent of the value of the prop |
erty. 1t runs counter to State leg
islation providing that loans on real |
estate by conservative financial insti- |
tutions must be limited to smaller |
proportion of the value of the prop |
erty.
b..
make the surrender of mortgaged |
property slow and laborious process
This process is designed to protect
the man who has a mortgage on his
house, but often only delays his dis |
possession and in nine cases out OF
ten fails to save his investment even |
tually. Under the national housing |
act. the property owners equity Is
protected until the final disposal OF
the property in normal real estate |
market.
Taken Over by F. II. A.
When mortgages cannot be paid and |
foreclosure is instituted, the prop |
erty is taken over by the Federal |
Housing Administration. which has
1t modernized or rehabilitated. The |
property is not placed on the market |
until the best price can be obtained
for it. Out Of the amount realized.
the Federal Housing Administration
Is reimbursed for what 1t paid over |
to the MORTGAGE under the insurance |
contract. What remains is paid to
the mortgagor, who is thus partly |
compensated for giving up his prop |
erty.
In the case of general depres-
sion, Mr.. Watson points out, con- |
siderable amount of foreclosed prop |
erty can be withheld from the market |
by the Federal housing administrator, !
In this way cushioning the drop in |
real estate values. In order to real
ize the full advantage of the Fed
eral act, however. it is necessary to
have a cheap. simple and readily |
available method of foreclosure. Sim |
ple and more expeditions foreclosure !
laws will result in lower interest rates,
In his opinion.
By Federal-State cooperation in
this direction, stability and con-
slant flow of ready capital can be
assured to the mortgage money mar
ket." says Mr.. Watson. 1T will thus
be possible to avoid the peaks and
depths of mortgage markets which
have characterized. and so largely
contributed to, an unsettled economic
life within the Nation"
Babson's Talk Optimistic.
Roger w. Babsons predictions on |
the 1885 outlook we're still being dis |
cussed in the financial district here |
today. His nine reasons for being |
optimistic appear sound, in the |
opinion of bankers and brokers here.
There is no doubt that bad situations
in business and industry are being |
cleared up daily. 1t is well-known
that more money is available for busi-
ness and industry than ever before.
The great increase in the number
of dividends declared by big corpora
tions has been a matter of comment
for weeks. AS Mr. Babson says. power
consumption in 1894 has broken all
records Collections are generally |
good and fewer foreclosures are being
reported than for several years. Less
labor strife Is a vital point The
fact that farm incomes have increased
so much is being stressed by all |
economists. Many claim it is the
main reason for the present retail
trade records.
Mr.. Babson mad lot to say about |
railroad securities, in reply to special
questions. He is not enthusiastic
over the purchase of railroad stocks
to be carried over a long period.
! Thinks the present rail situation is
too unsettled. He expressed the opin-
ion that bank stocks look attractive
and Is not as gloomy over the utility |
outlook as some other commentators.
He does, however, look for reductions
In rates.
Today's Trading on Exchange.
Capital Transit stock opened the
weeks trading on the Washington
Stock Exchange today with 16 shares
selling at 27. Later it sold again at
the same price
Washington Railway & Electric ap-
peared on the board at 1001a. Po-
tomac Electric 5iz per cent preferred
stock again commanded ILL.,
The only bond sale was in Wash
ington Gas SIS, 1860, a $500 turnover
being recorded at the strong price Of
109A.
Transit and Peoples Drug Stores
are still being quoted ex dividend. The
final quotations on Mergenthaler
Linotype today were "a bid and 3s
asked. Other prices we're practically
the same as last week.