Provisions of state statutes bearing on

domestic life insurance company investment in FHA mortgages

NOTES

Summary

Legislative language in the following number of states refers to:

Page notations refer to the page in the state sections of the source on which the quoted language appears.

Source: Investment Law Manual, Life Insurance Association of America.

PERMANENT NATURE OF FHA

Mr. CAMERON. Thank you, Mr. Chairman.

Senator RIBICOFF. Thank you very much, Mr. Cameron. I notice on page 3 of your statement you referred to FHA as "irreplaceable." Do you consider FHA as a permanent part of our Government structure?

Mr. CAMERON. You say do I consider?

Senator RIBICOFF. Yes. Do you look for FHA remaining for an indefinite period of time in the future?

Mr. CAMERON. Yes, sir.

Senator RIBICOFF. Then you would disagree with those who oppose creation of this Department on the ground that functions like FHA are temporary and will soon cease to exist. You don't agree with that reasoning?

Mr. CAMERON. I am sorry, Mr. Chairman. Would you state that again?

Senator RIBICOFF. You disagree with those who have opposed creation of this Department on the ground that functions like FHA are only temporary, and will soon cease, and therefore it is not necessary to create a Department with this function because the day may not be far enough away when we will no longer have FHA. You look for FHA being around for a long time?

Mr. CAMERON. Yes, sir; I do.

Senator RIBICOFF. Because if it is so much like "sterling" then you mortgage bankers like it.

Mr. CAMERON. We think it is the only means of importing funds from capital surplus areas into capital shortage areas. We think it is the only real mortgage instrument that is available today to do this job.

Senator RIBICOFF. Well, you would certainly recommend that FHA continue for the good of our housing industry, for the good of our people, and the good of our Nation?

Mr. CAMERON. Yes, sir.

S. 1599 EFFECT ON STATE LAW

Senator RIBICOFF. On pages 9 and 10 you point out that 17 States have laws referring specifically to loans insured by the Federal Housing Administration and you express concern that the simple upgrading of the Housing and Finance Agency to a Cabinet-level Department will somehow disrupt the flow of FHA funds. Now looking at your own appendix (exhibit 19) I notice that many State laws refer to a "Federal Housing Administrator." There is no Federal Housing "Administrator" now in our Government. There is a Federal Housing "Commissioner." Now this name change took place in 1948; they changed the name from Federal Housing Administrator to Federal Housing Commissioner. Did that cause any disruption in the flow of FHA money or cause a problem under State laws?

Mr. NEEL. May I address myself to that?

Senator RIBICOFF. Certainly.

Mr. NEEL. I do not think that the change from Administrator to Commissioner did cause any disruption. I do not think it follows