Evening star., 1935-04-13
Three and Half Billion Re.
sources Available in Local
Communities.
FAHEY ASKS OWNERS
CONSULT INSTITUTIONS
Savings and Loan Associations and
Cooperative Banks Able and
Willing to Let Out Funds.

To assist urban home owners of
good credit standing who are having
difficulty in securing satisfactory re-
financing for their maturing short
term home loans, John H. Fahey,
chairman of the Federal Home Loan
Bank Board, today issued statement
suggesting q method by which many
such borrowers may find it possible
to refinance their loans on convenient
terms.
AN increasing number of home
owners have recently written to the
board here in Washington and to the
regional Home Loan Banks" Mr..
Fshey stated, saying that they have
been unable to obtain long-term mort
gage accommodation from the finan-
cial institutions to which they have
applied, and asking us where they may
be able to arrange such financing.
"One reason why many home
owners have been disappointed is that
they applied to institutions which do
not specialize in home finance and are
not prepared to make any large volume
of long-term amortized loans, or
which, by their own policy or the laws
of the States in which they operate,
can only lend up to a small proportion
of underlying property value.
Consultation Desirable.
"Any home owner who is not in
financial difficulty, who may fail to
obtain reflnancing for either of these
reasons, should consult one or more of
fHa octi nf tho Eoloro1
Home Loan Bank System located in
his own community. The 5000 men,
bers of the Bank System employ prac-
tically their entire $500, 100000 of
resources in making home loans on a
long-term smortized basis. They are
private, local enhancing con-
Germs. BY far the largest proportion
OF their loans is made to wage earners
and salaried workers of modest in
comes, most of their mortgages rang
ing from $1,000 to $4,000, although
they are free to make loans of larger
amount.
These institutions now have ac-
cess to ample funds for loans at fair
rates to approved borrowers. Their
own resources and the enormous
credit reserves of the Home Loan
Bank system are available to meet
the ref1nancing needs of many home
owner applicants who are not in dis
tress. and therefore are not eligible
for H. o. L. C. loans. The usual
loan offered by member associations
is entirely repaid in from 10 to IS
years by small monthly installments
of from So to S12 for each $1,000 of
loan, depending upon the interest
rate and maturity.
In Practically All Cities.
Member institutions, for the most
part savings and loan associa ations
and cooperative banks. are located
in practically every city in the
United States. They are accustomed
to making loans up to a reasonably
high proportion of property value,
provided the applicants financial po-
sition and credit record are salts
factory, and the condition of his home
and neighborhood are such as to JUS
tify long term loan without undue
risk.
Reports from member institutions
assert tnelr aDlllty ana Willingness
to make long-term loans at reason
able interest rates for home loan re-
financing, and also for construction
or modernization. Our immediate
task is to place home owners who
seek suitable mortgage accommodation
in touch with lending institutions
which are prepared to meet their re-
quirements.
ITO help to solve this problem for
the home owner who is not in tax
arrears or in default on existing in
debtedness, we suggest that he write
directly to the Federal Home Loan
Bank Board, Washington, D. c., stat
ing the location and approximate
value of the property and the purpose
for which home loan is desired The
letter will be forwarded to the Home
Loan Bank of the district in which
he lives, and that bank will mail him
a list of member institutions of the
Home Loan Bank system located in
his vicinity. In many cases this pro-
cedure should prove successful in
providing suitable refinancing."