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CONTENTS

Statements of

Baldwin, C. B., Administrator of the Farm Security Administration, Pages
Department of Agriculture, Washington, D. C.----

26-44 Brown, Edgar G., president of the United Government Employees

and director of the National Negro Conference, Washington, D. C-- 44-46 Ferguson, Abner H., Federal Housing Administrator, Washington, D. C.-

9-22 Lee, Hon. Josh, Senator from Oklahoma-

22-26 McDonald, Stewart, Deputy Federal Loan Administrator, Washington, D. C---

8 Exhibits: Copy of H. R. 4693 and amendment..

1-8 Summary of insuring operations of Federal Housing Administration

for the period from June 27, 1934, to March 31, 1941, or as of
March 31, 1941.-

19

III

AMENDING NATIONAL HOUSING ACT

MONDAY, JUNE 2, 1941

UNITED STATES SENATE,
SUBCOMMITTEE ON HOME LOAN BANK AND RELATED
MATTERS OF THE COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C. The subcommittee met at 10:30 a. m., pursuant to call, in room 301, Senate Office Building, Senator John H. Bankhead 2d, presiding.

Present: Senators Bankhead (chairman of the subcommittee), Danaher, Taft, Brown, Radcliffe, and Maloney.

Senator BANKHEAD (chairman of the subcommittee). Gentlemen, the committee will come to order. We have under consideration H. R. 4693, An act to amend the National Housing Act, and for other purposes.

(The bill and an amendment are as follows:)

[H. R. 4693, 77th Cong., 1st sess.)

AN ACT To amend the National Housing Act, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the first sentence of subsection (a) of section 2 of the National Housing Act, as amended, is hereby amended by striking out “July 1, 1941" and inserting in lieu thereof “July 1, 1944."

SEC. 2. The last sentence of subsection (a) of section 2 of such Act, as amended, is hereby amended by (1) inserting "and other sources" after the word "premiums,” and (2) striking out "$100,000,000" and inserting in lieu thereof “$165,000,000."

SEC. 3. Subsection (b) of section 2 of such Act, as amended, is hereby amended by (1) striking out "exceeds $2,500” and inserting in lieu thereof "made for the purpose of financing the alteration, repair, or improvement of existing structures exceeds $5,000, or for the purpose of financing the construction of new structures exceeds $3,000;", (2) striking out “three" and inserting in lieu thereof "five”, and (3) striking out the period at the end thereof and inserting “: Provided, That any obligation with respect to which insurance is granted under this section on or after July 1, 1939, may be refinanced and extended in accordance with such terms and conditions as the Administrator may prescribe.”

SEC. 4. Subsection (c) of section 2 of such Act, as amended, is hereby amended by (1) inserting after the letter “(c)" the figure “(1)," (2) inserting before the word "property” the word “personal," and (3) adding at the end thereof the following new paragraph :

"(2) Notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, the Administrator shall have power (a) to deal with, complete, rent, renovate, modernize, insure, or sell for cash or credit, in his discretion, any real property conveyed to him in connection with the payment of insurance heretofore or hereafter granted under this title and (b) to pursue to final collection, by way of compromise

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or otherwise, all claims against mortgagors assigned by mortgagees to the Administrator in connection with such real property by way of deficiency or otherwise : Provided, That section 3709 of the Revised Statutes shall not be construed to apply to any contract of hazard insurance or to any purchase or contract for services or supplies on account of such property if the amount thereof does not exceed $1,000. The power to convey and to execute in the name of the Administrator deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real property or any interest therein heretofore or hereafter acquired by the Administrator pursuant to the provisions of this title may be exercised by the Administrator or by any Assistant Administrator appointed by him without the execution of any express delegation of power or power of attorney : Provided, That nothing in this paragraph shall be construed to prevent the Administrator from delegating such power by order or by power of attorney, in his discretion, to any officer, agent, or employee he may appoint.”

SEC. 5. The last sentence of subsection (f) of section 2 of such Act, as amended, is hereby amended by inserting after the word "charges” the following: “and all moneys collected by the Administrator as fees of any kind in connection with the granting of insurance as provided in this section, and all moneys derived from the sale, collection, disposition, or compromise of any evidence of debt, contract, claim, property, or security assigned to or held by the Administrator as provided in subsection (c) of this section with respect to insurance granted on and after July 1, 1939.”

SEC. 6. Effective on July 1, 1941, the first sentence of section 1 of the National Housing Act, as amended, is hereby amended by striking out “$10,000” and inserting in lieu thereof “$12,000.”

SEC. 7. Title I of such Act, as amended, is hereby amended by adding at the end thereof the following new section :

"SEC. 7. Nothing in this title shall be construed to exempt any real property acquired and held by the Administrator in connection with the payment of insurance heretofore or hereafter granted under this title from taxation by any State or political subdivision thereof, to the same extent, according to its value, as other real property is taxed.”

SEC. 8. Subsection (a) of section 203 of such Act, as amended, is hereby amended by (1) striking out "$3,000,000,000" and inserting in lieu thereof "$4,000,000,000"; (2) striking out “$4,000,000,000" and inserting in lieu thereof "$5,000,000,000”; (3) striking out of the second proviso “the effective date of this amendment and outstanding at any one time, shall not exceed 25 per centum of the total amount of the principal obligations of mortgages with respect to which insurance may be granted under this title after such effective date” and inserting in lieu thereof “June 3, 1939, and outstanding at any one time shall not exceed 35 per centum of the total amount of the principal obligations of mortgages with respect to which insurance may be granted under this title after such date"; and (4) striking out of the third proviso "July 1, 1941” and inserting in lieu thereof "July 1, 1944."

SEC. 9. The last sentence of subsection (a) of section 204 of such Act, as amended, is hereby amended by striking out “July 1, 1941” and inserting in lieu thereof “July 1, 1944."

SEC. 10. The first sentence of subsection (d) of section 512 of such Act, as amended, is hereby amended to read as follows: "No_individual, association, partnership, or corporation shall hereafter, while the Federal Housing Administration exists, use the combination of letters 'FHA,' the words 'Federal Housing' or "National Housing,' or any combinations or variation of such letters or words alone or with other letters or words as the name under which he or it shall do business, for the purpose of trade, or by way of advertisement to induce the sale of any article or product whatsoever, which use shall have the effect of leading the public to believe that any such individual, association, partnership, or corporation, or any article or product so offered for sale, has any connection with, approval of (or authorization from, the Federal Housing Administration, the Government of the United States, or any instrumentality thereof where such connection, approval, or authorization does not, in fact, exist."

Passed the House of Representatives May 15, 1941.
Attest:

SOUTH TRIMBLE, Clerk.

(H. R. 4693, 77th Cong., 1st sess. ]

AMENDMENT Intended to be proposed by Mr. BANKHEAD to the bill (H. R.

4693) to amend the National Housing Act, and for other purposes, viz: At the end of the bill insert a new title to read as follows:

TITLE II

SEC. 11. The Bankhead-Jones Farm Tenant Act is amended by inserting therein a new title to follow immediately after title I thereof and to read as follows:

"TITLE IA-FARM TENANT MORTGAGE INSURANCE PROVISIONS

"DEFINITIONS

"SEC. 11. As used in this title

“(a) The term 'mortgage' means a first mortgage on real estate, in fee simple; and the term 'first mortgage' means such classes of first liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State, district, or Territory in which the real estate is located, together with the credit instruments, if any, secured thereby.

“(b) The term 'mortgagee' includes the original lender under a mortgage, and his successors and assigns; and the term 'mortgagor' includes the original borrower under a mortgage and his successors and assigns, approved by the Secretary.

"(c) The term 'maturity date' means the date on which the mortgage indebtedness would be extinguished if paid in accordance with periodic payments provided for in the mortgage.

"FARM-TENANT MORTGAGE INSURANCE FUND

"SEC. 12. (a) There is hereby created a farm-tenant mortgage insurance fund (hereinafter referred to as the 'fund'), which shall be used by the Secretary of Agriculture (hereinafter referred to as the 'Secretary') as a revolving fund for carrying out the provisions of this title with respect to mortgages insured under section 13 as hereinafter provided. There shall be covered into such fund not exceeding 5 per centum of the sums appropriated for the fiscal year ending June 30, 1942, pursuant to the authorizations for appropriations made by section 6, as the Secretary may deem it advisable to cover into such fund.

“(b) Moneys in the fund not needed for current operations shall be deposited with the Treasurer of the United States to the credit of the fund or invested in bonds or other obligations guaranteed as to principal and interest by the United States. The Secretary may, with the approval of the Secretary of the Treasury, purchase in the open market debentures issued under the provisions of section 14. Such purchases shall be made at a purchase price which will provide an investment yield of not less than the yield obtainable from other investments authorized by this section. Debentures so purchased shall be canceled and not reissued.

"(c) All amounts credited to the fund shall be available for making payments required under this title.

“(d) The Secretary shall include in his annual report a complete statement with respect to the status of the fund.

“(e) There are hereby authorized to be appropriated to the fund for each fiscal year, beginning with the fiscal year ending June 30, 1942, such sums as when added to the sums covered into the fund under subsection (a) of this section will be adequate to carry out the provisions of this title.

"INSURANCE OF MORTGAGES

"SEC. 13. (a) The Secretary is authorized, upon application by the mortgagee, to insure prior to June 30, 1944, as hereinafter provided any mortgage offered to him which is eligible for insurance as hereinafter provided and, upon such

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