Evening star., 1943-04-04
Fahey Denies Offer
To Purchase Hole
Properties at Par
Says Banker Suggested
Liquidation for Cash,
But Dropped Proposal

Commissioner John H. Fahey OF
the Federal Home Loan Bank Ad-
ministration last night denied a
statement by Representative Dirk
sen, Republican, of Illinois, that
the Mortgage Bankers of America
had once offered to buy all the loans
and assets of the Home Owners
Loan Corp. on a dollar -for-dollar
basis.
Mr.. Fahey said neither the Mort
gage Bankers nor any other insti-
tuition or group of institutions has
ever offered to take off the Govern
ment's hands Hole properties and
loans on any basis that would not
involve huge losses to the Govern
ment and taxpayers"
In statement issued Friday
Representative Dirksen charged
that Mr.. Fahev had "misrepre-
sented" the actions OF the House
and the facts of a proposal by the
Illinois Congress member to liqui-
date the HOLC. Mr.. Dirksen said
lit would be interesting to have Mr.
Fahey explain in detail how he ar
rives at an estimate of $40 00O, 900
in losses if his assets were liquidated
now"
Estimate Reiterated.
Mr.. Fahey last night reiterated
his earlier claim to the Joint Com
mittee on the Reduction of Nom
Essential Government Expenditures
that forced liquidation of the HOLC
would cost the Federal Government
at least $4,000, 900, which, he said,
is 1878 100000 above the present de-
fcit of the agency.
MI. Fahey conceded that he had
once been visited by representa-
tive of the Mortgage Bankers, who
expressed the belief that the HOLC
assets could be liquidated for cash
and at par.
He was told" Mr.. Fahev said,
that if any such plan ever was
presented, it would be the most well
come one we had ever received. I
later wrote to him to see if his pro-
posal had developed any support,
but never heard from him again on
the matter. No one else has ever
evolved plan for taking over all
HOLC loans and properties without
a Government guarantee against
loss or without involving the sale
of many loans below par"
Explaining why the Government
has not offered to sell HOLC loans
on a county, Statewide, or any
other basis, Mr.. Fahey said that if
this were done. the Federal agency
would lose its best loans and would
have to carry the remainder without
compensating revenue.
Heavy Dumping Threat Seen.
Mr.. Fahey said the Dirksen-
sponsored amendment to the indie
pendent Offices appropriation bill
docs not provide funds for an
orderly liquidation, but deliberately
forces liquidation within a COM
paratively few months by failing to
provide funds even for normal op-
erations"
Such procedure, he said, would
force Hole to dump $l,750,000, 900
worth of assets on the mortgage
and real estate markets by next
December. Under the present
orderly liquidation" which, Mr..
Fahey said, has been carried on
over the past several years, so per
cent of Holes assets will have been
disposed of by July l.
In his statement, Mr.. Dirksen had
asked how the HOLC could lose
more money by liquidating now
rather than at some future date
when operating losses now range to
$23, 900, 900 year. The Representa-
tive invited Mr.. Fahey to explain
why he publicly complains when
an HOLC borrower pays off his loan
by transferring it to private business
as he did in recent months when he
complained bitterly about competi-
ton from private lending agencies. y