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FED ERAL R E SER VE BANK
OF NEW YORK
r Circular No. 3 7 8 2 *
1
L November IS, 1951 J

REAL ESTATE CREDIT

Amendment No. 7 to Regulation X of the Board of Governors of the
Federal Reserve System, Effective November 19, 1951

To all Persons Engaged in the Business o f Extending Beal Estate Credit
in the Second Federal Reserve District:

The Board o f Governors o f the Federal Reserve System has adopted Amendment No. 7 to
Regulation X , effective November 19, 1951. Follow ing is the text of a statement announcing
the amendment, released by the Board for publication November 16, 1951:
The B oard o f Governors o f the Federal Reserve System announced today an amendment to
Regulation X — Real Estate Credit— which w ill assist persons moving from one part o f the country to
another in the purchase o f a new home when there is a delay in obtaining the proceeds from the sale
o f their old home. Secondary borrow ing in connection with the purchase o f a new house under such
circumstances will be exempt from the regulation provided the credit is limited to a period not
exceeding six months. The exemption can be obtained on the basis o f an appropriate application to a
Federal Reserve Bank.
The amendment also changed the maximum period specified in connection with exempt loans
fo r materials, articles, and services used in new construction, from 30 to 36 months. This parallels
recent changes in Regulation W — Consumer Credit.

A printed copy of Amendment No. 7 to Regulation X is enclosed; additional copies will
be furnished upon request.




A

llan

S

proul,

President.

R E A L E STA TE C R E D IT
AM EN D M E N T NO. 7 TO R E G U L A T IO N X

IS S U E D B Y

TH E
W IT H

BOARD

OF GOVERNORS

OF T H E

FEDERAL

RESERVE SY ST E M

T H E C O N C U R R E N C E O F T H E H O U S IN G A N D H O M E
F IN A N C E

A D M IN IS T R A T O R

Regulation X is hereby amended in the follow in g respects, effective
November 19, 1951:
1. A d d the follow in g new subsection ( n ) to section 5 :
( n ) Unavoidable Sales Delay.— I f a Registrant desires to
extend credit to a person (1 ) who is moving from one m unicipality
or county to another, and (2 ) who is purchasing residential
property in the new location, which w ill be used in substitution for
residential property presently held by such person in the old
location as an owner-occupant, and (3 ) who has sold or is to sell
the property presently held and apply the proceeds o f the sale to
the new purchase, the Registrant may apply to a Federal Reserve
Bank for an exemption from this regulation, stating in the appli­
cation all the relevant facts and that the Registrant is satisfied in
good faith that the making or com pletion o f the sale o f the
presently held property has been delayed for an unavoidable reason
and that the proceeds from the sale will therefore be tem porarily
unavailable to apply to the new purchase. I f the Federal Reserve
Bank is satisfied that the delay is unavoidable, it will issue a
certificate o f exemption to the Registrant and thereupon the
Registrant may extend credit with respect to the property being
purchased without regard to the secondary borrow ing prohibition
in subsection (b ) o f section 4 o f this regu lation ; provided, however,
any credit extended which exceeds the maximum loan value o f the
property being purchased shall meet such requirements as may be
specified in the certificate issued by the Federal Reserve Bank and
shall not in any event have a maturity o f more than six months
from the date the certificate was issued.
2. Strike out “ 30 m onths” in subsection (I) o f section 5 and
insert “ 36 m onths” in lieu thereof.




P R IN T E D

IN

NEW

YORK


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102