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CONSTRUCTION OF NEW HOMES—Continued Mortgage interest charges and related characteristics, conventional first mortgage

loan originations on single-family homes for United States and selected metropolitan areas, August 1963—Continued

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Mortgage interest charges and related characteristics, conventional first mortgage

loan originations on single-family homes for United States and selected metropolitan areas, August 1963

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PURCHASE OF NEWLY BUILT HOMES—Continued

Mortgage interest charges and related characteristics, conventional first mortgage

loan originations on single-family homes for United States and selected metropolitan areas, August 1963Continued

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Total major types of lending

institutions.
Savings and loan associations..
Life insurance companies..
Mutual savings banks.
Commercial banks..
Mortgage companies.

5. 55 5. 64 5. 50 5.40 5. 46 5. 54

5. 58 5. 69 5. 52 5. 39 5. 45 5. 53

.19 0

02 0

23.1 23.6 28. 5 23. 4 17.6 22.8

$14, 374
15, 665
12, 020
15, 242
11, 932
13, 574

71.2 74.7 73. 1 67.2 63. 7 69. 2

$20,009 20, 834 16, 380 22, 710 18, 315 19, 425

PURCHASE OF PREVIOUSLY OCCUPIED HOMES

Mortgage interest charges and related characteristics, conventional first mortgage

loan originations on single-family homes for United States and selected metropolitan areas, August 1963

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Total major types of lending

0.92

. 96

institutions.
Sayings and loan associations.
Life insurance companies.
Mutual savings banks.
Commercial banks..
Mortgage companies.

6. 24
6. 27
5. 66
0
5. 79
5. 64

6. 38
6. 41
5. 68
0
5. 88
5. 66

.16
0
.50
.19

24.6 24. 7 24. 5

0
19.2
23.0

$18, 162
17, 945
20, 334

0
20, 292
23, 654

77.5 78. 5 60.4

0 56.0 57.7

$23, 768 22, 924 32, 114

0 38, 225 43, 528

PURCHASE OF PREVIOUSLY OCCUPIED HOMES—Continued Mortgage interest charges and related characteristics, conventional first mortgage

loan originations on single-family homes for United States and selected metropolitan areas, August 1963—Continued

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Senator SPARKMAN. The next witness is Mr. Milton Semer, General Counsel of the Housing and Home Finance Agency.

It looks like somebody "stacked" the committee, sending in our former assistants; certainly in the first two witnesses. Mr. Semer, we are glad to have you with us.

Oh, yes; and accompanied by Mr. Baughman and Mr. Maloney. Very glad to have you.

Mr. Semer, if you will proceed; and, for better identification for the record, introduce the two gentlemen who are with you.

STATEMENT OF MILTON P. SEMER, GENERAL COUNSEL, HOUSING

AND HOME FINANCE AGENCY; ACCOMPANIED BY J. STANLEY BAUGHMAN, PRESIDENT, FEDERAL NATIONAL MORTGAGE ASSOCIATION; AND PHILIP J. MALONEY, DEPUTY COMMISSIONER, FEDERAL HOUSING ADMINISTRATION

Mr. SEMER. Mr. Chairman, Senator Douglas, on my left, of course, is Stan Baughman, president of the Federal National Mortgage Association. And on my right is Mr. Philip J. Maloney, who is Phil Brownstein's Deputy in FHA.

With your permission, Mr. Chairman, in view of the fact that the preceding witness had an exhaustive and learned analysis of the bill, I could very well just file my statement and give you a very quick review of it.

Senator SPARKMAN. We would be very glad to do that. Of course, as you know, it is our custom to have the statement printed in full in the record. You proceed as you see fit.

Mr. SEMER. The three bills before the committee, of course, have been detailed at some length as to what they include, and so on.

There are two themes running through all these bills, Mr. Chairman. The first is to see if some sore of secondary market facility could be worked out by way of analogy to FNMA. FNMA has been eminently successful. It is confined, however, to FHA and VA mortgages. FHA and VA, for a variety of reasons, have shrunk in their proportion of the market. The overwhelming majority of mortgages now in the market are conventional.

So there has been a search for some time to see whether or not something comparable to the FNMA role could be performed for the conventional market.

The second main theme, or second main problem is the nature of Federal involvement.

Now, we have FHA almost 30 years old; FNMA is 25 years old-in its most recent version since its rechartering in 1954, it is almost a decade old.

So we have a lot of experience as to the role of Government in the mortgage market, its limitations, the problems the committee has to consider when bills come up to make sure the public interest is protected.

The chairman well pointed out the need these propsals seek to serve in the 1960 study—and of course just 2 years before that there was a proposal before the committee before the Congress generally. At that time the principal proponent was the savings and loan industry, which involved both a guarantee and a secondary market feature. This time it is the commercial banking industry.

At the time I recall the suggestion was made by the committee members that while the conventional market was in a sense compartmentalized, commercial banks and the savings and loan associations, savings banks, insurance companies, pension funds, had an unmeasured potential for involvement in the mortgage market.

The suggestion that came out of the committee at that time was that it would be helpful if the members of the various people that participate in the conventional market could get together.

It is not for me to say whether any progress has been made in 5. years in getting the four or five principal participants in the conventional market together with regard to either an insurance scheme or a secondary market scheme or some combination of the two.

Mr. McMurray has pointed out what, in his judgment, are many of the limitations of the proposal put forth by Dr. Flexner. As I listened to his presentation, I had to recall that many of these questions were raised about the proposal that was put before the committee in 1958.

I am not too sure whether much progress has been made. What is certain, however, is that insofar as there is a need to take a hard look at the conventional market to see how it may serve the Nation's housing, the need for such a hard look is much more urgent today than it was 5 years ago.

As a matter of fact, in just the last 8 or 9 months—since the usual yearend forecasts came out as to what is going to happen in the housing market, new starts have exceeded expectations.

There has been speculation over the last few years about the big upsurge in housing during the 1960's. Some observers feel that upsurge may be coming a little bit faster than forecast.

The fact that the rate of housing starts went up to 1.6—I think in 1 month to 1.7—was a little bit of a surprise. It now looks—unless there is a very drastic reversal, which is not at all likely—that we will

As I say,

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