Evening star., 1939-07-22
Further Economies
In Financing Costs
Held Remote
Fohey Says Other
Fields Must Yield
Lower Charges

Financing costs of residential
housing have been reduced substan-
TALLY in the last few years, and
further economies needed to stimu-
late home building must be found
IN other flelds-in lowering con-
struction costs and the service"
charges which accompany the pur-
chase and sale of homes-John H.
Fahey, chairman of the Federal
Home Loan Bank Board, told the
Temporary National Economic Com
mittee today.
Home owners in the United States
now are saving about $500,000,000 q
year through reductions in the in
terest rates on home mortgages,
largely as a result of the low rates
established by the Home Owners
Loan Corp. in its $4,000 100000 re-
financing operations and the influ-
ence of other Federal housing agen-
cies, Mr.. Fahey declared.
Interest savings are practically
the only home ownership savings
that have been effected in recent
SNdlo, llC gOl1 tllC i
is extremely doubtful if much more
can be saved in this direction which
will contribute to progressive hous-
ing development in the near future
The most promising direction in
which additional savings can be
made is through reduction in the
cost of the home itself. This ap-
plies particularly to homes which
may be available from $4,000 to
$4,000"
Low-Price Homes Slow.
Although he praised various eff
forts to develop better and more
economical small homes, Mr.. Fahey
asserted that he could not say that
rapid progress" was being made
to provide for the needs of families
with annual incomes of $4,000 and
less. Hope for progress in the fu-
ture, he declared, lies in the CO.
operation of all elements of the
residential construction industry
with the Government agencies which
are attacking the problem.
We iioNC 81 AOliS AlCSlCSlCO dSl &C.
ment on a common-se national
policy with reference to housing"
he said, that a good deal of plan
ming will have to be done before we
can attain the progress we would
like to have. There are plenty of
reforms in the appraisal of property,
IN the elimination of unfair and
unnecessary brokerage fees, in the
costs of title examination and of
foreclosure. in the amendment of
obsolete State laws, all of which
affect the costs and the safety of
home ownership, which need at
tention. These weaknesses cannot
be remedied except through the lead
ership of the Federal Government,
but Government effort cannot be
fully effective without the unre-
served support of the forward look
ing leaders of labor, industry and
the professions, whose cooperation
1t is essential to have"
Insurance Brings Confidence.
Mr.. Fahey reviewed at length the
influence exerted toward more pro-
gressive home financing and con-
struction policies by the institu-
tions he heads-the Home Owners
Loan Corp, the Federal Home Loan
Bank System and the Federal Saw
ings and Loan Insurance Corp
which bear the responsibility of the
supervision of urban home mort
gage assets amounting to nearly
IS 900 ,000,0 900. He declared that in
surance of accounts in the home
financing field had resulted in the
same public confidence created by
the Federal Deposit Insurance Corp.
in the commercial banking field, and
that insured associations have been
able to make mortgage loans at
lower rates, expand their opera
tions and render a greater service
to the public
Declaring that repeated surveys
have shown that savers look for
safety above everything else" and
that the reductions in dividend and
interest rates paid by savings insti-
tutions have not yet interfered with
the accumulation of savings, Mr..
Fahey at the same time served
warning that further reductions
carried the danger of discouraging
thrift.