Evening star., 1935-06-07
HOUSING COST CUT
BY j. S. FORESEEN
Fahey Says on Forum Home
Loan Bank Board to
Make 70 Slash.
Continued From Sixth Page.)


administered by the Board. 1t is en-
tirely different from the bank system.
It deals directly with home owners,
and was created under the far-sighted
leadership of President Roosevelt in
1888 to meet a great crisis resulting
from mortgage distress. During the
past two years, its relief operations
have been carried on upon a tremen-
dous scale throughout the United
States. The Home Owners Loan
Corporation is designed to help only
those home owners who are in gen.
uine mortgage distress and threatened
with the loss of their dwellings. In
carrying out this relief work. the
Corporation has already issued its
own bonds to the extent of almost
$4,000, 100000. Most of this money
has gone to the banks, building and
loan associations and other lenders
which originally held the defaulted
mortgages of over 100000 home
owners.
The corporate has helped not only
the home owners whose mortgages it
has refinanced, but every other home
owner as we'll as every building and
loan shareholder. savings deposition and
insurance policy holder. If the forced
sale Of houses for half what they we're
actually worth had been allowed to
go on in your town 1t meant that the
value Of your home was being marked
down and part of your savings was
lost
When the corporation began opera
tions foreclosures were running a
thousand day-the highest ever
known. II this had been allowed to
continue with the consequent steady
decline in the value of homes on
which mortgages are held by the
building and loan associations. banks
and insurance companies, millions OF
policy holders, shareholders and de-
poSitors would have faced enormous
losses. BY taking up distress mort
cages the corporation has stopped the
decline In urban real estate values
reversed the trend and protected the
value Of your property and savings
Fortunately Also in cooperation with
the Reconstruction Finance Corpora
ton. it has by promptly taking de-
faulted mortgages out of closed banks
made possible cash dividends of over
S400,000,000 to depositors in these
banks
Magnitude Realized by Few.
Like the many other recovery
measures which the President ano
Congress have developed. the magni-
tude and far-reaching character Of
the operations Of this corporation are
realized by but few of our citizens
It is time to appreciate. however, tina,
now in possession Of the tremendous
sums which the Government has
mortgages. most Of our private lend
ting institutions are in posi-.
tion to resume normal mortgage
lending and the public has a right
to expect them to do so. Moreover, il
is justified in expecting that loans on
homes will be made at more moderate
rates than have in the past prevailed
in many sections and for terms long
enough to permit comfortable repay
uents. The 15-year per cent loan
OF the Home Owners Loan Corpora
tion. when projected by the Govern
ment, was the most just and generous
plan offered up to that time in this
country, and it will have an important
influence on the future of mortgage
lending in the United States. Many
Of the lending institutions have al
ready adopted similar plans and we
are gratified to observe that in nearly
every section now they tell us they
-
tractive rates.
The Home Owners Loan Corpora
tion is an emergency and temporary
undertaking. The emergency need
has passed and the private lending
institutions must be depended upon to
meet our urban home mortgage de-
mands as they have in the past. a.
the Corporation clears up the bal
ance Of its applications.
Now, as to the third important
agency administered by the Federal
Home Loan Bank Board: Two years
ego. the crisis of home mortgage
finance and the acute distress of a
million home owners who were I'M
able to obtain refinancing disclosed
that more than half Of all the coun-
ties In the United States were abso-
lutely lacking in local home financing
resources. and that such facilities
were inadequate in most other sec
tions. including several of our largest
cities.
New Type Thrift Institution.
Congress, in June, 1893, accordingly
provided for new and improved type
of local thrift institution, to be known
as Federal savings and loan associa-
tions. They are regulated and in
spected by the Federal Home Loan
Bank Board, but are entirely private
In management and mutual in opera
ton. Except that they operate under
Federal charter and supervision and
follow q uniform procedure in their
service to homeowner borrowers and to
thrifty people whose savings are placed
In their care, these Federal associa-
tions are similar to the building and
loan associations and cooperative
banks which have long operated in
this country under State charter.
More than 800 Federal associations
are already chartered in some TOO