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S. 3548, by Senator Javits and others, to increase the urban renewal capital grant authorization by $500 million.

S. 3717, by Senators Bible and Kuchel, to permit urban renewal planning assistance for certain groups of adjacent communities, and S. 3781, by Senator Clark, to extend and amend the laws relating to urban renewal and low-rent housing.

S. 3805, by Senator Capehart, to amend title 42 of the United States Code relating to disposal of war and veterans' housing.

S. 3813, by Senator Douglas, to amend title I of the Housing Act of 1949 to give business concerns which are displaced from certain urban renewal areas a priority of opportunity to purchase or lease commercial or industrial facilities provided in connection with the redevelopment of such areas.

S. 3824, by Senator Payne, to clarify section 106 (f) of the Housing Act of 1949 with respect to the making of relocation payments for displacements caused by programs of voluntary repair and rehabilitation in connection with urban renewal projects.

S. 3855, by Senator Douglas, to amend title IV of the Housing Act of 1950 (college housing) with respect to the definition of "educational institution."

S. 3871, by Senator Beall, to encourage the construction of multifamily rental housing to provide living accommodations for essential civilian personnel employed in connection with an installation of the armed services.

S. 3885, by Senator Fulbright, to increase by $400,000,000 the borrowing authority of the Housing and Home Finance Agency for college housing loans.

Senate Joint Resolution 153, by Senator Payne, to direct the Administrator of the Housing and Home Finance Agency to encourage the establishment of State agencies to assist small communities with their urban renewal problems.

Senate Joint Resolution 171, which I introduced with Senator Capehart, to amend section 217 of the National Housing Act.

In addition to these numbered bills, I have prepared a committee print, which I will also ask the subcommittee to consider. This committee print, copies of which have been sent to each member of the subcommittee, is also available to witnesses. I would like witnesses to examine this print and comment upon its as the opportunity occurs. For information of interested persons, there is attached to the committee print a brief analysis of its provisions. It will be seen that this document is prepared in an attempt to put into legislative language those suggestions made to the housing subcommittee which do not appear in other bills, or which appear in a much different form. The fact that I have had this committee print prepared does not necessarily mean that I am wedded to each of its provisions or that I do not support other important bills referring to subjects not covered by the print. It will insure that subjects not otherwise brought to the attention of the subcommittee will receive consideration.

Several weeks ago, the Committee on Banking and Currency reported an emergency housing bill. This bill was designed especially to stimulate residential construction as an antirecession measure. It passed both Houses of the Congress and was signed into law by the President on April 1.

While I do not want to dwell on this matter at any great length, I do want to say that I believe we should all be encouraged by the housing activity already generated by this legislation. For example, figures obtained from the Veterans' Administration on last Friday, May 9, show that during the month of April requests for VA appraisals for new construction increased to 24,800. This represents a 195 percent increase over the figures for March of this year. Similar figures, which we will undoubtedly hear from Mr. Mason of the FHA this morning, further indicate that activity in the home-building field has been definitely accelerated as a result of the committee's foresight. As all of you know, the emergency housing legislation placed primary emphasis on expanding and amending existing FHA and VA single-family housing programs. For this reason, no bills are before us at this time relating to the VA direct-loan program. Officials of the Veterans' Administration, therefore, are not scheduled to appear during the hearings, but will submit a report on the status of the direct and guaranteed home-loan programs for insertion in the record. (See p. 178.)

In addition, I believe I should mention that some of the proposals contained in the pending bills in connection with FHA single-family housing programs are now outdated by the emergency housing legislation. The emergency housing legislation was for a specific purpose and does not supplant the normal requirements for housing legislation. We begin this morning to consider those requirements.

In this connection, I want to make my second observation. It would appear from the many inquiries and referrals, not only to me, but also to the staff of the subcommittee, that the principal item of interest in this year's housing legislation will be the urban-renewal program.

As you know, the subcommittee held hearings on the subject of urban renewal in six cities during the recess of the Congress last fall. During these hearings, invaluable testimony was received from many, many witnesses who are experts in the urban-renewal field. These witnesses were generally the persons responsible for administering the program on the local level and, therefore, know the practical and physical aspects of the program. The testimony of these experts pointed up several shortcomings of this vital program. In addition, the interest in urban renewal has grown to the point where there is considerable evidence to indicate that it should not only be extended for a number of years, but also that the annual level of Federal capital grants should be materially increased. This is a problem that the subcommittee must decide.

These bills, with the reports of the various agencies thereon, will be inserted in the record.

(The bills and reports referred to follow :)

[S. 2791, 85th Cong., 1st sess.]

A BILL Creating the Home Loan Guarantee Corporation

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Home Loan Guarantee Corporation Act”.

SEC. 2. Home Loan Guarantee Corporation herein referred to as the "Corporation" is hereby created and chartered as a corporation for the purposes herein stated.

SEC. 3. The Federal Home Loan Bank Board herein referred to as the "Board" is authorized and directed to prescribe bylaws, rules, and regulations not inconsistent with this Act and operate said Corporation.

SEC. 4. Said Board shall provide for the issuance of $50,000,000 capital stock of the Corporation, divided into shares of par value of $100 each. Upon the call of the Board, the Federal home loan banks shall subscribe to such capital, purchase, and pay for the same in proportion to the par value of the outstanding capital of each Federal home loan bank at the time of such call, but such capital shall be issued in full shares and may be adjusted by said Board and said banks shall purchase the same. Said stock shall pay a cumulative dividend as determined by the Board which shall be approximately one-half of 1 per centum in excess of the average dividend paid by the Federal home loan banks and shall be retirable at par in the discretion of the Board. A portion or all such stock may be so retired but such retirement shall not be done so as to reduce the total capital, reserves, and surplus of the Corporation below $50,000,000, nor below that amount which in the opinion of the Board is necessary or desirable to retain adequate coverage of assumed risks outstanding.

SEC. 5. In addition to the capital issued to the Federal home loan banks the Corporation is authorized to issue the same type of capital stock to approved mortgagees as herein defined provided they buy and maintain such stock ownership, equivalent to one-seventh of 1 per centum of the loans owned and the loans serviced by them and if, as, and when stock is retired such stock shall be retired on a pro rata basis. The Corporation shall adjust the issuance and retirement of such stock to the nearest full $100 share.

SEC. 6. Approved mortgagee means a mortgagee to which the Corporation has issued its certificate of approval which is a bank, savings and loan association, or similar institution or an insurance company or any other organization engaged in the home mortgage business which has a net worth of 1 per centum of the total of the home mortgages owned and serviced or $100,000, whichever is greater, and which the Corporation finds to be experienced and suitable for an approved mortgagee.

SEC. 7. Upon the date of enactment of this Act, the Corporation shall become a body corporate, and shall be an instrumentality of the United States and as such have power

(1) to adopt and use a corporate seal;

(2) to have succession until dissolved by Act of Congress;

(3) to make contracts;

(4) to sue and be sued, complain and defend, in any court of law or equity, State or Federal; and

(5) to appoint and to fix the compensation, by the Board, of such officers employees, attorneys, or agents as shall be necessary for the performance of its duties under this title, without regard to the provisions of any other laws relating to the employment or compensation of officers or employees of the United States. Nothing in this title or any other provision of law shall be construed to prevent the appointment and compensation as an officer, attorney, or employee of the Corporation, of any officer, attorney, or employee of any board, corporation, commission, establishment, executive department, or instrumentality of the Government. The Corporation, with the consent of any board, corporation, commission, establishment, executive department, or instrumentality of the Government, including any field service thereof, may avail itself of the use of information, services, and facilities thereof in carrying out the provisions of this title. The Corporation shall determine its necessary expenditures under this Act, and the manner in which the same shall be incurred, allowed, and paid, without regard to the provisions of any other law governing the expenditure of public funds. All necessary expenses in connection with the making of supervisory or other examinations and the payment of guaranteed losses including the provision of services and facilities therefor, shall be considered as nonadministrative expenses.

SEC. 8. For the purposes of this title, the Corporation shall have power to borrow money, and to issue notes, bonds, debentures, or other such obligations upon such terms and conditions as the Board may determine. Moneys of the Corporation not required for current operation shall be deposited in the Treasury of the United States, or upon the approval of the Secretary of the

Treasury, in any Federal Reserve bank, or shall be invested in obligations of, or guaranteed as to principal and interest by the United States. When designated for that purpose by the Secretary of the Treasury, the Corporation shall be a depository of public money under such regulations as may be prescribed by the Secretary of the Treasury, and may also be employed as fiscal agent of the United States, and it shall perform all such reasonable duties as depository of public money and fiscal agent as may be required of it.

SEC. 9. All notes, bonds, debentures, or other such obligations issued by the Corporation shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. The Corporation, including its franchise, capital reserves, surplus, and income shall be exempt from all taxation now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority; except that any real property of the Corporation shall be subject to State, Territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed.

SEC. 10. The Corporation shall make an annual report of its operations to the Congress as soon as practicable after the 1st day of January in each year, Said report may be a part of the annual report of the Board.

SEC. 11. No individual, association, partnership, or corporation shall use the words "Home Loan Guarantee Corporation," or any combination of any of these words which would have the effect of leading the public in general to believe there was any connection, actually not existing, between such individual, association, partnership, or corporation, and the Home Loan Guarantee Corporation, as the name under which he or it shall hereafter do business. No individual, association, partnership, or corporation shall advertise or otherwise represent falsely by any device whatsoever that his or its mortgages are insured or in anywise guaranteed by the Home Loan Guarantee Corporation, or by the Government of the United States, or by any instrumentality thereof; and no insured mortgagee or holder shall advertise or otherwise represent falsely by any device whatsoever the extent to which or the manner in which his or its mortgages are insured by the Home Loan Guarantee Corporation. Every individual, partnership, association, or corporation violating this subsection shall be punished by a fine of not exceeding $1,000, or by imprisonment not exceeding one year, or both.

SEC. 12. The Corporation is authorized to borrow money from any source, including the Federal home loan banks and Federal Savings and Loan Insurance Corporation, and they are authorized to make loans to it upon such terms and conditions as may be prescribed by the Board, and the Corporation is authorized to use the facilities of any other Government department or agency, including the Federal home loan banks and Federal Savings and Loan Insurance Corporation, and to pay reasonable compensation therefor, and Government departments and agencies are authorized to provide such facilities and services.

GUARANTY OF HOME MORTGAGES

SEC. 13. The Corporation is authorized to guarantee home mortgages for any member of a Federal home loan bank or approved mortgagee upon the terms and conditions herein stated and rules and regulations made by the Board not inconsistent herewith. Any member of a Federal home loan bank or approved mortgagee desiring to have a home mortgage guaranteed as herein provided shall submit an application as prescribed by the Board and attach thereto a true copy of the obligation of the homeowner and the security instrument and an appraisal of the security, and the Corporation may prescribe the form for such appraisal and it may require additional appraisal. Mortgages eligible to be guaranteed hereunder may not be for a principal amount in excess of 90 per centum of such appraisal and shall be first mortgages on homes designed for single family occupancy and occupied by the owner, or in good faith intended for such occupancy in an original amount not in excess of $20,000, amortized monthly, beginning not more than twelve months from date, within twenty-five years. The guaranty shall be for not in excess of 90 per centum of 20 per centum of the amount of such mortgage. If at any time said original indebtedness is paid down below 50 per centum of the original accepted appraisal of the security for the loan, such

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insurance shall expire. If the loan is not paid down to 50 per centum of the original approved appraisal and the mortgagee forecloses, it shall give the Corporation thirty days' notice before the institution of foreclosure. Within such thirty days the Corporation shall appraise or cause to be appraised the property securing the mortgage and give consideration to the collectibility of the debt from the security and from the obligor or obligors on the mortgage. The Corporation shall within thirty days (a) pay the holder the amount invested in the mortgage and take transfer of the same, or (b) pay the percentage of the unpaid principal which is guaranteed in cash plus any foreclosure costs and outlays, including attorneys' fees which are guaranteed, or (c) pay the holder in cash the amount guaranteed which is in excess of such foreclosure appraisal if the holder is willing within thirty days to keep the security and settle on that basis. The Corporation shall also have power to compromise and settle any claim on its guaranty.

The amount payable shall not exceed 90 per centum of the principal remaining at the date of foreclosure or acquisition in lieu of foreclosure which is equivalent to the percentage of the original mortgage guaranteed. Any loss resulting from failure of or defect in title or failure of the holder to keep in force customary hazard insurance shall be deducted from the amount otherwise payable for such guaranteed loss. Said guaranty shall be in favor of the original holder of such mortgage and shall be for the benefit of such original holder and any subsequent holder which is a member of a Federal home loan bank, or approved mortgagee. SEC. 14. The premium for such home mortgage guaranty shall be prescribed by the Board but shall not be less than 5 per centum nor more than 10 per centum of the amount by which such mortgage is guaranteed and shall be payable in cash by the mortgagee or the mortgagor at the time the mortgage is guaranteed. Upon the payment of such premium, the Corporation shall issue its guaranty policy to such mortgagee in the form prescribed by the Corporation.

SEC. 15. Open-end mortgages may be guaranteed as provided in this Act but if any additional advances are made before the guaranty expires, the guaranty shall expire unless a copy of the additional advance agreement is forwarded to the Corporation together with a premium for the amount of such advance. If such advance is made and forwarded and the premium paid the mortgage shall remain guaranteed for the percentage of the loan originally guaranteed until the debt is less than 50 per centum of the original appraisal.

SEC. 16. The Board is authorized to disapprove any such member institution or approved mortgagee for any unsound practices as eligible to obtain such guaranty and to prescribe general rules and regulations for the organization and operation of said Corporation and to make such requirements as may be reasonable and not inconsistent with the Act. Without restricting the Board in making general rules and regulations it is expressly authorized to restrict the percentage of the total loans made in any calendar year or the total percentage of its loan portfolio which any member institution or approved mortgagee may have guaranteed as provided in this Act.

SEC. 17. In addition to the guaranty of mortgages as herein provided the Corporation is authorized to guarantee any part or all of foreclosure costs and outlays including attorneys fees on its guaranteed mortgages for an additional premium on terms and conditions and for premiums prescribed by it.

SEC. 18. The Corporation is authorized to require members of the Federal home loan banks and other publicly examined and supervised institutions to agree to make reports and supply copies of reports of public examinations and of public and private audits and to make their books and records available to it and to permit it to examine. In the case of other approved mortgagees the Corporation is authorized to require them to agree to make reports, supply copies of examinations and audits and to make their books and records available to the Corporation for examination and to permit such examination. In all cases such agreements may require the mortgagee to agree to pay for the examinations and audits reasonably necessary for the protection of the Corpo

ration.

SEC. 19. If any provision of this Act, or the application thereof to any person or circumstances, is held invalid, the remainder of the Act, and the application of such provision to other persons or circumstances, shall not be affected thereby.

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