In addition, there have been about 7 or 8 individual loans made to members of minority groups through the program.

Mr. WIDNALL. Mr. Chairman.

The CHAIRMAN. Mr. Widnall.

Mr. WIDNALL. How many regional groups do you have operating? Mr. VINER. We have 16 regional committees.

Mr. WIDNALL. And the loans are submitted to the regional groups? Mr. VINER. That is right.

Very briefly, the process is this: Our major share of applications to date has been referrals made to us of applications for Veterans' Administration direct loans. The VA has agreed to submit those applications to us, and we are given 20 working days in which to find a private lender who is willing to make a guaranteed loan to the applicant for a Veterans' Administration direct loan. Those applications come to our regional committees.

In addition, we have our own application forms for individuals, for lending institutions that want to originate loans but don't have outlets for them, and for builders who wish to obtain financing for projects they intend to build. Those four types of applications all come into our regional offices.

Mr. WIDNALL. What groups of lending institutions have indicated their willingness to enter into this program?

Mr. VINER. We have about 1,500 different lending institutions. They are representatives of the life-insurance companies, mutual savings banks, savings and loan associations, commercial banks, and mortgage bankers. So we have all five types of mortgage lending institutions in the program. And the heaviest participation on a percentage basis would be by the life-insurance companies; the life-insurance companies with 97 percent of the life insurance industry's portfolio of FHA and VA loans are participating in the program. They represent the biggest single ratio of participation to number of companies in the industry.

The others go down-we have over half of the mutual savings banks, we have about 800 commercial banks, and about 500 savings and loan associations. These figures are rough because we are now in the process of getting in new questionnaires indicating participation from a number of lenders, and I haven't yet gotten the final figures. We have also had a few withdrawals from lenders who originally said they would participate. So the figures are in a state of flux right now.

Mr. WIDNALL. What would you say it was, the average amount of loan application?

Mr. VINER. I have the figure right here. Of the loans made in the month of April, the biggest proportion was between $8,000 and $9,999. The figures on applications that have not resulted in loans-where the loans have been rejected, or where we have been unable to place VA direct loans in the time limit we have been given-have been almost identical.

Mr. WIDNALL. Are these loans being made essentially in the sparsely populated areas?

Mr. VINER. Yes, sir; with the exception of the minority group loans. We have a large list of areas that have been designated as eligible for assistance. That includes all of the Veterans Administration direct loan areas, it also includes a number of other communi

ties, most of them under 25,000 population. In addition to that, we have no area restrictions at all for members of minority groups who are unable to obtain financing under the same terms and conditions as available to others. So the minority group applications have come largely from the cities.

Mr. HIESTAND. Would you care to generalize as to the average interest rate of those loans?

Mr. VINER. I have figures here. For the months of March and April, when there were 109 loans. I can run right down the figures here. Twenty-two loans were taken at par, 28 were taken at 98 to 99.9. Mr. HIESTAND. What would be the interest rate payable on that mortgage?

Mr. VINER. I haven't computed the rate to maturity. They are all 41/2-percent VA or FHA loans.

Mr. HIESTAND. That is what I wanted to know.

Mr. VINER. Some at slight discounts.

Mr. HIESTAND. Thank you.

Mr. WIDNALL. Do you feel that with an increased understanding of the program that you are going to get much more enthusiastic response in the future?

Mr. VINER. Yes; we find already from indications of interest that the program is catching on very definitely right now, and we expect a very sharp increase in the number of loans placed through it.

Mr. WIDNALL. Actually, I think that the people of the United States, the average person residing in the United States, doesn't understand that this program is really moving, providing help for minority groups to obtain single-family housing, the way they could in the past? I think it is important to get that across to the people.

Thank you very much.

Mr. VANIK. Mr. Chairman.

The CHAIRMAN. Mr. Vanik.

Mr. VANIK. I would like to ask Mr. Viner about these 201 loans that have been granted.

How many of those loans were builders' loans?

Mr. VINER. Ninety-nine.

Mr. VANIK. And the remainder were

Mr. VINER. Individual applicants. And most of those were VA direct loan applicants.

Mr. VANIK. And can you tell us the lending agencies, specifically, with respect to these 201? How many were insurance loans and how many bank loans?

Mr. VINER. With respect to these March and April figures

Mr. VANIK. That is the 109 loans?

Mr. VINER. Of the 109 loans, 16 were made by savings and loan associations, 9 by commercial banks, 35 by life-insurance companies, 5 by mutual savings banks, and 44 by mortgage bankers. However, in that 44 the majority were actually taken by life-insurance companies. We have a procedural change that gave the mortgage bankers a figure. This will be dropped out of our future statistics. We have changed our referral procedure to expedite the placement of loans. Some mortgage companies serve as correspondents of life-insurance companies and mutual savings banks.

Mr. VANIK. Once the loan is obtained what does your agency do? Mr. VINER. We act as a clearinghouse. We bring together a lender

who is willing to lend in a given area, with a borrower or applicant who has been unable to get FHA-insured or VA-guaranteed financing through normal channels. We get them together and they negotiate their own terms, in terms of the application that they have received, and we merely write up a credit for one of these loans that is on the list when we have a notification from the lender that an agreement has been made and the loan will be granted to the applicant.

Mr. VANIK. Do you in any way advertise the lending institution so that a person can just read about it and go there himself and save the forwarding of an application to several offices?

Mr. VINER. That, of course, can be done, because if the applicant knows where to go-but I think that with a massive program like this, we hope those people will come to us and we feel we can give very prompt service. We have a rotation system so no one lender will get the bulk of the applications, or will be favored with the best applications. We have a system where each company gets its applications in strict rotation order, except for the large builder projects, where the smallest lenders would be unable to take the projects. For the individual applications the office doesn't decide in advance who will get the loan. It goes directly to whoever is next on the list.

Mr. VANIK. By regions, can you give us a rough idea as to where the bulk of the loans have been made, of these 201?

Mr. VINER. Yes. We have 16 regions, and the loans made have been highest in the State of Texas, which is in our region 13. We have had 84 loans out of the 201 in Texas. That is accounted for partly by 80 builder applications, which, as I remember, ran to 3 projects. At this early stage it is very hard to tell where the biggest volume is going to be. We have more applications from the southern area of the country than any other section.

Mr. VANIK. As far as the applications are concerned, if 99 of the 201 were builders, it would then appear that 50 percent of the service to date has been rendered to builders rather than individuals; is that correct?

Mr. VINER. The service that has actually resulted in loans I would say has gone to builders.

Mr. VANIK. Fifty percent builder applications, almost?

Mr. VINER. Yes. Whether that will continue or not is questionable. We are getting builder applications in some volume, but it takes so long to process the individual applications where the commitment is not issued until the appraisal is in. We have these seven-thousand-odd referrals of individual applications, many of which—in fact, we think about half of them, at least, will result in loans. So I think those figures may change as time goes on.

Mr. VANIK. Are there any situations or any loans that have been granted where the individual has tried to construct his own home? Mr. VINER. Yes.

Mr. VANIK. How many?

Mr. VINER. I am not sure on the actual loans granted figure how many that would be, but we have a number of those.

Mr. VANIK. Would there be 3 or 4 ?

Mr. VINER. I think about three. But that is just a guess. We have a number of applications for that.

Mr. VANIK. So that the opportunity for the person seeking to build his own home in accordance with an approved design, the percentage result is not too great?

Mr. VINER. No, so far. Of course, those cases would generally be in the very small minority, anyhow. I don't know what the ratio would be to total houses built. But we handle those.

Mr. VANIK. In how many of the districts have there been no loan approvals? Mr. VINER. No regions. Two regions, No. 7, which is Kentucky, and No. 11, have not yet had any loans-have only had one loan, rather, and Region 8, Cleveland, which is your area, was our last to get started and has no loans. They have an extremely large backlog of applications that they are working on now in Cleveland. They are having difficulty in getting current. It covers the States of Indiana, Ohio, and Michigan.

Mr. VANIK. But not one loan has been granted?

Mr. VINER. Not yet. That office was started about a month after the others.

Mr. ASHLEY. Will you yield?

Mr. VANIK. Yes.

Mr. ASHLEY. How long has your committee been in operation? The national.

Mr. VINER. The National Committee came into operation in September 1954 and that was before the plans and organizations of the program had been set up.

Mr. ASHLEY. But some of our figures tend to astound me a little bit. 201 loans have been processed out of 7,000 applicants; is that right? Mr. VINER. That is right.

Mr. ASHLEY. Is that good or bad, or what kind of a percentage do you figure on that?

Mr. VINER. We are unable to estimate. I think if I could explain how the procedure has operated—as I say, we are getting all of the Veterans Administration's direct-loan applications. We could not take those applications until our offices were in operating condition. Most of the offices couldn't be set up until the regional committees had been organized and staffs hired. The first office to open opened on about the 3d of January, and the last office, the Cleveland office, did not open officially until March 20.

As soon as the office was on its feet we asked the Veterans' Administration to write out to its people to send in their applications. They were given 15 days to do that.

Mr. ASHLEY. Is that a requirement of the law?

Mr. VINER. No, it is an agreement with the Veterans' Administration.

Mr. VANIK. So that as a matter of fact, this 7,000 some-odd applications come to you by way of an agreement rather than by anything that is stimulated on its own?

Mr. VINER. So far the majority have been that type of application, yes.

Mr. VANIK. On the GI applications?

Mr. VINER. Yes, GI direct-loan applications.

Mr. ASHLEY. There have been some reports, and I would simply like your comment on this, that your committee has spent a considerable

63137-55- -8

amount of effort this is simply a report, as I say-trying to put the direct G. I. home loan out of business. What would be your comment on that? From your previous statements it would appear that at least on the face of it that appearance would be there.

Mr. VINER. Well, the words "putting them out of business" is one way to express it. This program, as you know, was proposed by the private lending institutions, and then adopted in the Housing Act of 1954, and one of its major goals is for the private financial institutions to take the responsibility they feel is their own to make loans no matter where they are or to whom they are made. In other words, they feel the market needs to be adjusted so that without adding any money to the total amount of mortgage investment funds available loans will be channeled from areas where there is plenty of money to areas of need. The VA's direct-loan program is in one of the areas of relative need, and our objective is to make it unnecessary for the Government directly to make these loans to veterans who have been unable to obtain them through their local lending institutions.

Mr. ASHLEY. What about the settlement costs to a veteran? When you get a guaranteed VA loan are his settlement charges more than on a direct VA loan?

Mr. VINER. In one respect, yes. The Veterans' Administration does not require title insurance on its own direct loans, so that in comparison with the closing costs on a direct loan and a private loan there is an additional cost, but the cost of settling a VA-guaranteed loan under our program in one of the remote areas will be roughly identical to the cost on a guaranteed loan in a city.

Mr. ASHLEY. You mean a remote area that doesn't have title insurance?

Mr. VINER. The title companies are insuring title on the remote area loans now, through us. The VA does not require it. Private lenders generally do.

Mr. ASHLEY. So your answer would be that the settlement charges are higher to a veteran because of the title insurance, and only because of that?

Mr. VINER. Yes, higher in comparison with a direct loan, and not in comparison with a regular guaranteed loan in a city, for example. Mr. ASHLEY. I was simply interested in what was available to the veteran before, and what is now being made available to him under your program.

Mr. VINER. Yes.

Mr. ASHLEY. That is all.

Mr. MULTER (presiding). Are there further questions, Mr. O'Hara? Mr. O'HARA. I am suggesting, Mr. Chairman, that Mr. Cole if possible should return tomorrow and that at least an hour should be set aside for questioning on what I consider a matter of great national concern, housing for the aged. Ten or twelve members of this committee are sponsoring a bill providing housing for the aged. I don't think it is a matter that should be taken up when many members have already left and the House is in session. I was here at the opening this morning. We went into many other subjects, and this, which I regard as most important, was not reached until the House had convened and most of the co-sponsors of the bill for housing for the aged had left. Under the circumstances I do think that Mr. Cole should return tomor