Evening star., 1938-03-19
MORTGAGE BODY
SEENF|LL|NG NEED
National Real Estate Group
Head Analyses Expected
Position of Unit.

The new national mortgage associa-
tion law should give our national
movement for new housing construc-
tion and our real estate mortgage
structure the protection and aid of a
mortgage discount agency such as the
National Association of Real Estate
Boards for eight years has pointed
out to be primary need. Edward A.
MacDougall, New York. chairman of
the associations Committee on Real
Estate Finance, makes this statement
in brief analysis of the position the
proposed new mortgage associations
may be expected to take.
While it is impossible to predict
whether mortgage associations, other
than the first, set up by R. F. c., will
be formed under the new amendments
to Title of the National Housing
Act, the powers permitted them and
the limitations placed upon them are
such that there should be scope for
successful operation. The value of the
legislation will depend, of course, upon
the reasonableness and soundness of
the regulations under which it is ad-
mlnlstered," Mr.. MacDougall said.
Further, any immediate effect upon
financing and construction will depend
also upon many uncertainties within
ana without the real estate financing
and construction industry. But the
essential principle which is incor-
porated in the act is that which the
National Association of Real Estate
Boards has advocated earnestly since
1881.
May Be Needed Stimulus.
The new institutions authorized
are given, individually, essentially all
the powers and conditions for opera
ton which we for some time have
ASKED be given to some central mort
gage discount agency. Such an agency.
We nave held, should be privately
owned but under proper governmental
supervision.
The new mortgage associations, If
more than one is operated, will be CEN
ralized through their uniform F. H. A.
regulation and administration. and
the administrator of the F. H. A. has
authority to keep on investigating
what need here should still be met.
The associations have essentially
the general function which would have
been given a central mortgage bank
under the Wagner-Pepper bill now be-
fore Congress, and it may be assumed
that the wide and consistent support
which has been given the Wagner
Pepper bill has been an element in
pointing out the desirability of the
new enactment.
I'VE may hope that the newly au-
thorized institutions represent a CEN
tral market for sound mortgages
which, by the stabilizing influence
such an aid should have on mortgage
money supply, on real estate values
and on mortgage and construction
practice, may well become the central
agency under which We may begin
the needed rebuilding of our Ameri-
"an cities.
Stabilizing Factor.
MANY of us who have worked for
q A4AAISSA Va JSdlo 3Ol o + CuCl al
gage bank are hopeful that these ma
tional mortgage associations may ulti-
mately work into central bank or a
group of regional banks having suffi-
GENTLY large capital and credit so as
to insure the ready sale of debentures
and the free flow of capital for urban
mortgages In a manner similar to that
Tor short-term loans under the Fed
eral Reserve Bank System.
I'VE feel also that subject to proper
restrictions as to the percentages of
loans made, that ultimately such bank
or banks may be free to loan money
on all kinds of real estate against
which its debentures may be issued.
Such a national system privately
owned would be great stabilizing
factor in the urban mortgage field and
would ultimately lead to an equaliza-
ton and perhaps lowering of interest
rates on real estate throughout the
country when backed by the issue of
debentures of a large central institu-
ton or group of regional institutions
Of large size"
Inc Il. F. c., in addition to the S10,-
O00,0 placed in the first mortgage
association. which, 1t indicates, may
be taken over by private capital, holds
in reserve an additional $4,000. 900
with which it is understood to be ready
to match private capital dollar for
dollar in the setting up of other asso-
Citations. If this were to be fully used
thus. the associations, since they may
issue debentures to total of 20 times
their paid up capital and surplus,