Evening star., 1934-12-01
MORTGAGE MONEY.
|SDECLARED SAFE|
me Loan Bank Review
7cnieS Interference by
Government.

-Iortgage men and mortgage money
cd have no fear for the future, ac-
Ccrding to an analysis of the situa-
ton in the leading article of the
November issue of the Federal Home
Loan Bank Review, just published
The article makes plain that the crea-
ton of various Federal agencies deal
ing with home financing and hous-
ing does not mean that the Govern
mcnt plans to take over the nome
mortgage business from private hands
To dispel the uncertainties which
are harassing mortgage men the
article reviews what has happened to
the mortgage market. what the Gov
ernment has been forced to do and
what the trend for the future may
be. 1t is shown that to check the
collapse in 1888 of the home financing
structure was only half of the Gov
crnment's immediate task The other
half was to revive the mortgage mar
ket and reopen general investment
ohannels to mortgages. This, it is
aid, could be accomplished only by
il
lie mortgage Structure. particularly
le widespread use of the Short-term
lamortizad lean and of second
o.tgageS.
To Correct Defects.
To correct these defects, the article
ltes, is the purpose of each OF the
ornament agencies under the Fed
al Home Loan Bank Board and me
ederal Housing Administration. The
Governments program aims by pro-
ding adequate safeguards ito stlmu-
ste a flow of private funds under
ormS fair to the lender and favor
Bile to the borrower"
The article concludes with an analy-
S of the immense need for re-
lancing existing mortgages on resi-
initial and commercial properties
I'd the financing of new mortgage
provide new homes.
All the qualified mortgage talent
ailable and more the article con-
iudes, will be required in reca3ting
lis huge volume of mortgage indebt-
cdness in long-term form which again
will command the confidence OF in
vcstment markets. With the existing
situation rationalized in the light OF
crescent values the groundwork will
te laid for a revival Of building con-
..ruction and of new mortgage
.-nancing."
New Business Methods.
practical plan to permit build
'lT and loan associations to undertake
W business while at the same time
u tening the liquidation of their
resent frozen assets is contained in
tie second article of the November
Review.
This plan recommends the segrega-
ion of such assets as are income-pro-
ducing from those which are not. 1t
urges the reorganization of building
and loan associations with large per-
centages of non-proft-pr producing as
sets into two institutions: One, virile
financial institution which can imme-
diately serve the investors and bor-
rowers of the community, and the
ether a liquidation agency operating
under economical management
Encouraging evidence of the public
'onfidence which the Federal stamp
II thrift home financing institutions
ommand is given by report in the
Review on the growth of new Federal
savings and loan associations. This
lows that in 292 new Federal asso-
, ations private investment has aver
3ed Q III per cent increase since
heir organization less than cix
,lonths ago. At the same time these
ccw associations are meeting an in
easing demand by borrowers for
>0rtgage accommodation
The November Review contains
her articles and tabylations devoted
problems Cf lnl-r-st to e;'ecut:t eS
thrift home financing institutions,
rticularly the DEVELOPMENT of the
-icral homo lc2n bark S'st2m and
= nominal :n.er~ rats c.le-ged b.
i'ding and ;ocu s3scciatCl h ouGh-
the county.