Evening star., 1937-01-09
FIJI. A. CITES AID
+ IN REF|NANC|NG
Mortgages TotaIing More
Than 1884, $40, 900 Ac.
centen for Insurance.

Home mortgages for refinancing pur-
poses amounting to more than 1884,
$4,000 had been accepted for insur-
snce by the Federal Housing Admin
istration through December 26, it was
announced today. The figures serve
to emphasize the Importance Of the
F. H. A. program in establishing a
sound mortgage market.
There can be no sustained home
building revival without a sound mort
gage market, in the opinion of Arthur
Walsh, assistant Federal housing ad-
ministrator.
In order to create this sound mort
gage market and keep it sound, Walsh
said today, in discussing the figures, it
should be recalled that Congress au-
thorized the Federal Housing Admin
istration to insure q billion dollars
worth of mortgages on homes and
large scale housing projects existing
on the date of enactment of the ma
tional housing act, with an additional
amount If the President deems it nee
essary.
Expresses View in Detail.
Walsh expresses his views in detail
on the importance of the rednancing
feature of the housing administrations
program in the January issue OF the
Insured Mortgage Portfolio.
THE Federal Housing Administra-
ton was established as permanent
agency to insure properly secured and
otherwise eligible mortgages. regard
less Of whether the security was an old
or new dwelling" Walsh states in the
article.
To-day, with the Federal Housing
Administration acting as an impair
tial agency passing on the adequacy
of the security. behind the insured
mortgage loan, the borrowers ability
to meet the monthly payments which
the mortgage loan involves, and, final
". affording lending institutions pro-
lection for the principal OF their
loans, mortgage funds are becoming
once more available, and the public
has a new and better-founded faith
In the home as an investment for
savings"
Walsh then points out that close.
70 GA per cent of the home mortgages
accepted for insurance by the hous-
ing administration were secured by
existing construction. While 1t Is
logical to assume that this ratio will
decrease, he pointed out, the argu-
ments originally advanced for includ-
ing mortgages on existing construc-
ton are still cogent.
Provisions Seen Vital.
From the standpoint of the home
purchaser, the financial institution
and the realty market" the article
states, "and for purposes Of proper
functioning of the national housing
act, the maintenance Of the acts
present provisions In this respect
seem vital"
It is further pointed out that the
Federal Housing Administrators ap-
proval of qualified houses, old and
new, for insured mortgage financing
has done much to restore public conf
dence in the wide section OF the realty
market which those houses embrace.
The fact of their eligibility for
mortgage loans under the insured
mortgage plan" the article continues,
constitutes hallmark which, coupled
with the attractions of that plan to
purchasers, confers distinct sales ad-
vantages upon those houses.
THE market for old houses-and
It should be remembered that at this
time an extremely high percentage of
the homes in this country are more
than five years old-would inevitably
suffer If this hallmark and those sales
advantages were removed from them.
"Discouragement of new construc-
ton. eligible for this modern type of
financing, might also be expected
through the realization of the pur-
chaser that, should he have to sell
his new home the next day, it would
no longer be eligible for such financ-
ting or approval.
Danger of Restriction.
"Finally, the effectuation of the
housing acts purpose to create q
sound mortgage market would be
dealt a most serious blow If the mort
gage insurance program were re-
stricted to new homes only. Influence
of the Federal Housing Administra-
ton would thereby be excluded from
60 substantial a portion of the real
estate market that the great oppor-
tunities which the act now offers for
improving lending practices, reducing
financing charges, extending terms OF
loans and bringing order into the
chaotic home mortgage market would
be destroyed.
From every standpoint, therefore,
It seems apparent that continued
eligibility of both old and new con-
struction for insured mortgage loans
Is not only desirable, but essential if
the insured mortgage system and its
benefits are to be maintained and en-