Evening star., 1935-06-08
MORTGAGE BANKS
NEED IS STRESSED
Bill Becomes Central Pro.
posaI, Association of
Boards Says.
(continued From First Page.)


periodic frozen condition in financial
institutions"
The association asks that the bill be
given wide and thoughtful study by
every business group affected, includ-
ing real estate boards, banking and
mortgage financing groups, groups
concerned with construction and
groups constituting investors in real
estate and in real estate mortgages.
1t Is confident that such study will
result in thorough public appreciation
of the great and sound service which
the proposed mortgage bank will give.
The proposed agency, while it would
be authorized to draw upon the Fed
eral Government for portion of its
initial capital. would draw capital
first of all from those persons and
institutions which expect to utilize its
services. 1t would come into being
only If and when it had, from these
private agencies, paid-in stock to the
extent of at least $10.000,000 No
stockholder, except the United States,
would be permitted to hold more than
] per cent of the banks stock.
President Schmidts report covers
also comprehensive recommendations
made by the association to the Federal
Government on action ahead in the
whole field of mortgage financing and
housing. The recommendations have
been discussed with officers of various
agencies of the Federal Government in
the housing and mortgage financing
field. The report, by action of the
board Of directors, is to be mailed out
to member boards at an early date.
Important Proposals.
Important proposals made by the
association include the following:
Creation of a reserve system for
long-term credit at the earliest pos
sible moment (through Federal mort
gage discount bank.
Creation of a single unified research
and planning agency for real estate
and housing.
Creation of an agency to deal with
the social problems of housing, one
that could encourage cooperative &C
ton between the Federal Government,
the States and municipalities, working
through private enterprise. Sugges-
tions toward the development of such
a program:
Arrangement with mortgage lending
institutions whereby loans on new
home construction up to 80 or IS per
cent Of value would be granted. the
Federal Government advancing 25 to
80 per cent of the total mortgage at
an interest rate of to 3 per cent,
with provision that major portion
of the differential in interest rate
would apply to amortize the Govern
ment's advance.
Employment of the associations
plan for bettering the character of
blighted areas through creation of dis
tricts with certain autonomy of &C
tion, thus making possible cooperative
action of property owners.
Any new building for low-income
groups to be carried out not through
direct Federal action, but through
private limited dividend corporations,
the Government loaning funds for
these corporations at low interest
rates. (Plan contemplates removal
of undue encumbrances placed on
such corporations in recent State per-
nissive legislation)
simultaneously, the association an
t1ounces the creation within its
membership of new agency in the
real estate mortgage field expected to
make possible the needed step back to
normal operation, operation so far as
possible by and through existing
private institutions and services.
The new agency was formed at
national mass meeting of realtors en-
gagged in the making and servicing Of
mortgages. held at Detroit May 80.
It is to be known as the National
Mortgage Board of the National As
sociation of Real Estate Boards. 1t
grows from the associations former
mortgage and finance division.
Changing Needs Considered.
The new agency is set up to meet,
accurately, the changing needs in the
mortgage field occasioned by these
conditions:
% The fact that some 18 Federal
agencies now hold or shortly will hold
control over approximately one-fourth
of the country's mortgages.
90 The fact that under the Secur-
ities and Exchange Commission pro-
vision must be made for licensing
over-the- counter sale of mortgage Sc
curities.
The new agency will offer to the
r. H. A., H. o. L. c., r. F. c. and
other Federal agencies and to all in
terested institutions, means Of