Evening star., 1951-05-19
51Honle0utpui
To Top Quota,
Officials Hold
Mortgage Credit
Problem Seen
As Temporary
By Robert J. Lewis
Reel Esfote Editor of The Sfor

Responsible Government hous-
ing officials are convinced that,
barring a miracle, production of
homes will exceed the $4,000
limit for 1851 which was set some
time ago to combat imitation and
conserve materials during the
defense period.
This was learned today as:
/. The National Production
Authority prepared to impose a
square-foot limitation on homes
as a substitute for the $35, 1000
ceiling put into effect May 3.
2. New curbs on mortgage credit
were being discussed with the pur-
pose of holding back next years
housing production more ade-
quately than present curbs were
able to do this year.
8. Builders were talking Of a
"crisis" in the building industry
owing to difficulty encountered
recently in obtaining mortgage
money.
Tight Money Temporary"
One high-placed Government
housing official today discounted
the currently tight mortgage
money situation as Temporary"
"It is true that mortgage money
has become less available owing
to heavy commitments Of large
sources of secondary credit early
in the year." he said. y
Ordinarily, these sources would
have cashed in Government bonds
to continue to make mortgage
credit available. Since to sell
under the present circumstances
would mean they would have to
take loss on the bonds, they are
standing pat.
However, before many months
their cash position can be ex-
pected to catch up with them and
they would then have adequate
funds to loan on mortgages"
The official said fewer oppor-
tunities would be open for in
vestment in mortgages on COM
mercial construction in the future,
and that this would aid home
builders.
Can't Eat Money.
He scoffed at the idea that the
mortgage-money situation would
remain tight for very long.
II can say with the late Mayor
LaGuardia: What are they go
ing to do with their money, eat
it?'" s-. -.
He said he meant by this that
the money would be y available
and that it would gravitate to
home mortgages as 1t has done
previously.
Though some mortgage men
hope for a rise in the interest
rate on CT and FHA home loans,
this official said he didn't see even
a remote possibility that the
Government would raise these
rates.
He indicated that what he called
"the Macedonian cries" of GER
tain builders as to the threat to
the industry represented by the
current mortgage situation may
turn out to be a boomerang.
Frighten Wrong People.
with these scare tactics. build
ers may find that they have
frightened the wrong people" he
said.
"They may find they have
frightened building materials
manufacturers into cutting back
production inordinately, and wake
up to discover they have tough
notwithstanding problem on
their hands later, when money
is seeking out mortgage invest
mentS."
Officials of the organized build
ing industry seem to be pursu-
ing two separate tacks in their
statements concerning the mort
gage market.
w. P. Atkinson, president Of
the National Association of Home
Builders, said here this week dur
ing a meeting of the organiza-
tion's board that he thought the
current shortage of mortgage
money represented one of the
worst crises in the industry's
history"
On the other hand, Herbert
s. Cotton, general counsel of the
association, wrote in the May is
sue of a magazine issued by the
organization and distributed tc
its members that some bold spir-
its, in fact, claim that by sum-
/Ca~ TfyTyYc na-- ~ oN