OCR Text |
Show WARNING GIVEN BY HOME OWNERS' Urgent warning Is Issued by the Home Owners' Loan Corporation Corpor-ation for the attention of private and Institutional lenders holding mortgages subject to exchange for bonds of the Corporation, to emphasize that such lenders after af-ter consenting to accept bonds of the Corporation cannot require re-quire further cash payments from the mortgagor, subject to penalty upon conviction, of not more than $10,000 fine, or imprisonment im-prisonment for not more than five years, or both. It Is pointed out that it the appraisal of property by the Corporation Cor-poration is not high enough to warrant the Corporation giving the mortgagee the full amount of his lien in face value of bonds of the Corporation, the mortgagee mort-gagee Ls entirely free, within a stated period of time, to withdraw his consent to accept the bonds. If he does not do so, he cannot thereafter require the mortgagor to make up this difference in cash, and any agreement to such effect is illegal. Moreover, the mortgagee must not require the applicant or a third party to pay any difference which may exist at the time he receives the bonds, between their market and their face value. In the event of any payment rl this nature, the mortgagee may be held liable for violation of Sec- tion 8 (e) of the Home Owners' Loan Act. The Home Owners' Loan Corporation Cor-poration is making every effort to promote a thorough understanding under-standing of the Act and the conditions con-ditions under which it operates to extend relief to distressed home owners and to holders of home mortgages which are in default. In some instance?, the Corporation Corpora-tion states, home-owner borrowers who were not in acute distress have discontinued payments on their original mortgage, in the hope of thus becoming eligible for aid from the Corporation. To prevent this practice, the Corpor. ation stipulates that any home owners who willfully stops his payments on his original mortgage, mort-gage, in the hope of obtaining a Corporation loan, thereby makes himself ineligible for a Corporation loan by his record of unwillingness to pay his debts, and by increasing his accumulated accumulat-ed past due obligations. Thus, deliberate delinquency by a home owner means the immediate risk of foreclosure and the loss of the property, and removes any possibility pos-sibility of relief through the Corporation. Cor-poration. Home owners are urged to make all possible payments to the original lender until such time as the Corporation loan for which they have applied is actually ac-tually closed and the new mortgage mort-gage by the Corporation has replaced re-placed the original mortgage. The Corporation restricts its loans to persons who are in genuine distress at this time, but who may be depended upon to meet their mortgage indebtedness to the limit of their ability. Many applications from willful delinquents delin-quents have already been rejected, re-jected, and under such circumstances circum-stances the original mortgagee is often warranted in prompt foreclosure action. |