Second Mortgage Pool

Worried for several months about the effect of frozen real estate loans on banks, home-owners & builders, President Hoover announced two weeks ago a relief plan he will put before Congress (TIME, Nov. 23). New York City realtors and savings bankers took heart when they read of this latest national credit pool, lost no time in proposing a smaller auxiliary pool in their own district. Officers of seven big metropolitan savings banks met with Joseph Paul Day, famed realty auctioneer, to draw up plans for the company.

Main purpose of the corporation would be to create second mortgages rather than to maintain their liquidity, which will be the function, for prime first mortgages. of the President's Home Loan Discount Bank system. Homes costing $15,000 or less would be favored. If the corporation gets started, a prospective builder of a $15,000 house would not have to have the $4,000 or more of cash usually required above his first mortgage to start building. He could get a second mortgage from the corporation for this amount, build a home without putting up any real money. In the building boom which might follow such easy terms, great benefit would come to realtors, banks, loan associations, the building trades & members of their unions.

To start the corporation its sponsors want $50,000,000, to be contributed from those who will benefit most. Realtor Day was selected to canvass the building industries around New York, report to the bankers in a month.

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