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CONFIDENTIAL REPORT

June 1, 1935.
Volume of loans insured under Title I continues
to show a substantial increase in each successive week since the
opening of Spring*
Tuesday, May 28th, was the largest individual day
since the introduction of the plan, the total loans reported as
insured that day being $1,125,655.
Total loans insured under Title I are $76,762,337.
Total claims under Title I aggregate approximately
$18,326.

Title II has now been in operation generally throughout
the United States for about ten weeks*
In respect to Title II, it will be recalled that it
was necessary to have enabling legislation passed in 45 states
before this part of the program could function fully. So far, in
43 states the law has been so changed. It has, therefore, been
a matter of approximately ten weeks since Title II could be put in
complete operation throughout the United States.
The progress has been encouraging. In the past ten weeks
the daily average of mortgage applications received has been increased from $413,871 per day, to last week!s daily average of
$1,356,582.
Applications, presumably acceptable for mortgage loans,
to date aggregate $61,249,770. All such applications have been
accompanied with appropriate 3FHA fees for risk rating, surveys,
valuations, etc. This does not include rejections made where
questioning indicates appraisal would be unfavorable.
$26,345,323 in mortgages have been insured, or commits
ments issued.
$8,219,306 presumably acceptable applications have been
rejected after survey.
The difference, or. $26,685,141

is now in process of

survey.
It is interesting to note that of the mortgages insured
or commitments issued, 34 percent covers new construction. The

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- 2 average insured loan is $4275.

Commitments on low cost housing projects are as follows:
1.
2.
3.
4.
5.
6.
7.
8.

MEADVILLE, PMNA.
CLARENDON, VA.
LA GRANGE, ILL.
NEW YORK, N. Y.
BROOKLYN, N. Y.
RYE, N. Y.
DUNDALK, MD.
HENDERSON GDS,,MD.

804,000.
875,000.
126,764*
1,436,640.
5,441,274.
600,000.
1,031,312.
1,422,158.
11,737,148,

$147,529,818 low cost housing projects have "been submitted
for consideration.
The following legislation amending and otherwise affecting
the National Housing Act has teen enacted into law. Particular attention
is called to the amendment noted under Section 29 (c), which was made in
accordance with the recommendation of the Council.
Section 28 (a)
The first sentence of section 2 of the
National Housing Act is amended (l) " y striking out irJanuary" and inb
serting in lieu thereof "April", and (2) " y inserting "before the period
b
at the end thereof a comma and the following: "including the installation of equipment and machinery."
(b) The last sentence of section 2 of the National Housing
Act is amended to read as follows: "No insurance shall " e granted under
b
this section to any such financial institution with respect to any obligation representing any such loan, advance of credit, or purchase " y it
b
(l) unless the obligation bears such interest, has such maturity, and
contains such other terms, conditions and restrictions, as the Administrator shall prescribe; and (2) -unless the amount of such loan, advance
of credit, or purchase is not in excess of $2,000 except that in the
ca,se of any such loan, advance of credit, or purchase made for the purpose of such financing with respect to real property improved by or to
be converted into apartment or multiple family houses, hotels, office,
business or other commercial buildings, hospitals, orphanages, colleges,
schools or manufacturing or industrial plants, such insurance may be
gx^anted if the amowit of the loan, advance of credit, or purchase is not
in excess of $50,000."
Section 29 (a) Subsection (c) of section 203 of the National
Housing Act is amended by adding at the end thereof the following new
sentence:- "In the event that the principal obligation of any mortgage
accepted for insurance under this section is paid in full prior to the
maturity date specified in the mortgage» the Administrator is further
authorized in his discretion to require the payment by the mortgagor

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- 3 of a premium Charge in suph amount a s the Administrator determines to
b$fcquitable*but not In excess of the aggregate amount of the premium
charges that the mortgage^ would otherwise have "been required to pay if
the mortgage had fcohtinued to be insured under this section until such
maturity
*
(b) The first sentence of subsection (f) of section 205 of the
National Housing Act is amended by striking out the words "premium
charge11 and inserting in lieu thereof the words "annual premium charge".
(c) The last sentence of subsection (a) of section 204 of the
national Housing Act is amended to read as follows: "For the purposes
of this subsection, the value of the mortgage shall be determined, in
accordance with rules and regulations prescribed by the Administrator,
by adding to the amount of the principal of the mortgage which is unpaid
on the date of such delivery, (l) interest on such unpaid principal from
the date foreclosure proceedings were instituted or the property was
otherwise acquired as provided in this subsection to the date of such
delivery at the rate provided for in the debentures issued to the mortgagee,
less any amount received on account of interest accruing on such unpaid
principal between such dates, and (2) the amount of all payments which have
been made by the mortgagee for taxes and insurance on the property mortgages.1
Section 30. Subsection (d) of section 301 of the National Housing Act is amended to read as follows:
"(d) Ho association shall transact any business except such as
is incidental to its organization until it has been authorized to do so
by the Administrator• Bach such association shall have a capital stock
of a par value of not less than $2,000,000 and no authorization to
commence business shall be granted by the Administrator to any such
association until he is satisfied that such capital stock has been subscribed for at not less than par and paid in full in cash or Government
securities at their par value,"
Section 31. Section 302 of the National Housing Act is amended
to read as follows:
Section 302. Each national mortgage association is authorized
to issue and have outstanding at any time notes, bonds, debentures, or
other such obligations in an aggregate amount not to exceed ^1) twelve
times the aggregate par value of its outstanding capital sto<$k, and in
no event to exceed (2) the current fo.ee value of mortgages held by it
and insured under the provisions of Title II of this Act, plp,s the
amount of its cash on hand and on deposit and the amount of its investments in bonds or obligations of, or guaranteed as to principal and
interest by, the United States. No national mortgage association shall
borrow money except through the issuance of such notes, bonds, debentures,
or other obligations, except with the approval of the Administrator and
under such rules and regulations as he shall prescribe."
Section 10b. of the Federal Home Loan Bank Act has been amended
to make the facilities of that system available to non-member approved

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— 4—
mortgagees as follows:
"Each Federal Home Loan Bank is authorized to make
advances to nonmembor mortgagees approved under 'title II
of the national Housing Act. Such mortgagees must " e
b
chartered institutions having succession and subject to
the inspection and supervision of some governmental agency,
and whose principal activity in the mortgage field must
consist of lending their own funds. Such advances shall
not " e subject to the other provisions and restrictions of
b
this Act, "but shall "be made upon the security of insured
mortgages, insured under title II of the National Housing
Act. Advances made under the terms of this section shall
" e at such rates of interest and upon such terms and condib
tions as shall " e determined " y the Federal Home Loan Bank
b
b
Board, "but no advance may " e for an amount in excess of 90
b
per centum of the unpaid principal of tho mortgage loan
given as security."

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