Evening star., 1936-04-26
HOLE. PAYMENTS
REPORTED HIGH
Figures Reveal Borrowers
Repaying at Rate of
9O.1 Per Cent.

Distressed home owners VINO nave
sought financial relief from the
Home Owners Loan Corp. are paying
back their loans at rate of 90.1 per
cent Of the totals currently due. most
recent statistics of the corporation
reveal. In other words, the $l9,273,-
600 paid back to the corporation dur
ing March was 90.1 per cent Of the
amount due In that month.
In the same direction. more than rs
per cent of all interest and principal
due the corporation: up to March 81,
from the beginning of its operations
in June, 1888, had been paid. Specif1-
cally. S267 ,799, 900 had been paid. back
on obligations amounting to 1885,
354,996.
Foreclosures Are Low.
With loans recorded on LOOT POT
pieces of property through April is
of this year. the corporation reported
that foreclosure had been ordered in
only 1o.485 cases through the end OF
March. On a percentage basis this
amounts to about per cent. In orig
inal value, the total mortgages held
amount to s3O50, ,907 .452.
OF the lO,485 foreclosures ordered,
the property involved has been ac-
uuired in 2,493 cases, in 333 instances
the proceedings were halted when the
borrowers paid up substantial part
of their delinquency. 1872 are in abey-
ance because of State laws extending
the redemption period. The remain
ing cases are in process OF foreclosure.
In another breakdown, it is found
that 1921 of the foreclosures are in
cases of abandoned property, 1856
through death of the borrower, 141
through some local legal complication
that has forced termination of the re-
lationship and the remainder are cases
Of "wilful default"
Must Build Sinking Fund.
Only in such circumstances of will
fulness," 1t is explained by John H.
Fahey, chairman. does the corporation
institute foreclosure proceedings. With
$4,000, 100000 of H. O. L. c. bonds out
standing. it is essential, he emphasizes.
that borrowers make sufficient repay
rnent to enable the corporation to
meet its bond interest requirements
and gradually to build up sinking
fund for retirement of these obliga-
tions.
In cases of genuine distress, he said.
the corporation does not press for i'm
mediate repayment beyond comfort
able means of the borrower. In cases
of bad faith. however, foreclosure is
considered justified.
Acquisition of properties by the
corporation cannot be prevented" Mr..
Fahey said in discussing policy of the
corporation. Borrowers will not be
unduly harassed. nor asked to do the
impossible but, under the law, the
corporation must collect the money
due from borrowers who are able to
pay.
"Out of so large a number, some
thousands are inevitably represented
by people who prove irresponsible. and
who do not respect their obligations.
Even in normal times, the large lend
ing institutions have to deal with thou
sands of pieces of property on which
they are obliged to foreclose in the
course of year.
Must Prove Inability to Pay.
''If funds for payment of the s3,ooo,-
100000 in bonds are not collected from
the H. o. L. c. borrowers, the burden
would be thrown upon the entire public
in the form of taxes. This fact Is
secondary in the H. o. L. c. collection
policy only to the necessity of relieving
actual distress.
The corporation in cases of con-
tinued genuine distress has permitted
borrowers temporarily to postpone at
least part of their payments. Home
owners who are clearly in difficulty
are given every consideration.
"On the other hand, such leniency is
possible only where the borrower can
prove his present inability to meet his
payments and that he is acting in
good faith Investigation of more than
5000 requests by H. o. l.. c. borrowers
for postponement of their installments
revealed that less than 1,100 of them
were actually in difficulties. The
other 5000 were merely seeking to
evade their obligations. Their de-
mands we're not granted, and most of
them have paid up rather than lose
their homes. To imply that the H. o.
L. c. is .shylock' in foreclosing
against persons who refuse to pay
when they can pay is to argue that
dishonest people should be given free
ownership Of their homes on the Fed
eral credit, at heavy cost to every one
else"