Evening star., 1935-11-30
HOUSING ACT SEEN
AID TO BANKING
Financial Institutions Push.
Ina Loans to Half Billion
Mark.

Approaching the first half billion
dollars of results under the operation
of the national housing act, two fac
tors particularly mark the success of
this new undertaking of the Federal
Government.
These are an almost limitless profit
able outlet for frozen bank funds and
q very marked rise in residential con-
struction.
The record is made clear in hun
dreds Of letters from financial insti-
buttons, industry, commerce and indi-
Viduals atteSting the effectiveness Of
the national housing act in just what
Congress intended it to accomplish
stimulation of industry and re-em-
ployment as well as improvement in
the American standard of living.
New home construction and mort
gage refinancing under the national
housing act gained comparatively lit
tie momentum until last Spring. This
was chiefly due to the need for ena-
bling legislation. However, by Spring,
Ing the practice of mortgage lending,
and 1t was only after this that the
housing act operated without any
curtailment.
With the approaching end of 1885
approved financial institutions are
pushing the total volume Of business
In modernization credit loans and
mutually insured mortgages toward
the first half billion dollars. Through
November as the actual total amounted
to $45o, ,a68,947.
Chance to Own Homes.
I'VE can't dismiss this gratifying
total" Stewart Mcdonald, admins
TRAITOR, said, without thinking that
we have given the banking interests
Of the country new, safe and highly
profitable form Of investment for bank
funds And We are equally warmed by
the conviction that we are giving to
countless thousands Of wage earners a
chance to own their homes-perhaps
to many their first and only opportu-
nifty
Residential construction is rising
oil over America. We know, of course,
that insured mortgages are not wholly
responsible for the 200 per cent in
crease shown in recent months. Build
ing of homes, however, is contagious
thing. One new home provokes an
other, and another, just as modern
ization Of one home in neighborhood
lr fv1 {ySoYN
n1ent, sometimes to the point Of in
creasing real property values in an en-
tire section. And the fact that home
building and real property improve
fnent not only results in widespread
unemployment Of skilled and un-
skilled labor, but stimulate industry as
well, is too elemental to need any
explanation.
Banking and lending interests
have been quick TO recognize the
national housing act as an opportu-
nifty for increasing bank revenues. Un-
solicited statements from bankers
themselves prove conclusively that
this is fertile and almost unex-
plored field Of investment.
SESS,SSo,56E IN mortgages.
Through November Is, mortgage
lending agencies throughout the coun-
try recorded a total Of $229, ,996, ,562 in
mortgages selected for appraisal. In
the light Of the mutual insurance Of
mortgages, no mortgage lender can
lose capital invested under the ma
tional housing act.
Hundreds Of mortgage lending
agencies recognize the opportunity for
increased banking revenues in insured
mortgages and have developed highly
specialized and sometimes novel
means for increasing the number in
their portfolios.
ut is true that under the old short
term mortgage system, with its higher
interest rate, some lending institu-
tions did earn greater immediate re-
turn. But the fallibility of this sys-
TEN and its resultant collapse in time
Of stress is too well known now to be
preferred over the single mortgage
system Of the Federal Housing Ad-
nninistration.
Banks, trust companies and other
mortgage-lending institutions have
come to realize that equally as i'm
portant as earning money IS the
achievement of greater security and
higher living standards for the Amer
lean people. We certainly can expect
happier results under the national
housing act in this respect than under
the old system"