- Mr. THOMAS. What does the foreclosure situation look now as compared to 60 days ago? It was a dark picture then.

Mr. HARDY. It is proceeding at about the same level. It is not increasing.

Mr. THOMAS. Do you have it under control? Is the economy of the country the reason? The general economic condition of the country is what controls the foreclosures. Do you notice the foreclosures have fallen off any in the last 60 days?

Mr. HARDY. They seem to be running about the same as they did earlier, sir. They are at about the same level.

Mr. THOMAS. We shall not go into that here. You have a good record in the regular bill as to the number of foreclosures.

INVENTORY OF ACQUIRED PROPERTIES

How many properties do you have on hand now? Give it to us as of some recent date. You should have it up to August 1.

Mr. HARDY. The only figure I have is as of March 31, at which time there were almost 16,000 one- to four-family homes.

Mr. THOMAS. Almost 16,000. How much do you think you have added to it now?

Mr. HARDY. Probably another 4,000.

Mr. THOMAS. 20,000 that you have on hand now, foreclosed properties.

What is the total money value of them?

Mr. HARDY. Around $200 million.

Mr. THOMAS. How much financial loss will you take on those properties?

Mr. HARDY. About 10 percent, I should say. Somewhere between 10 and 15 percent, on the basis of past experience.

Mr. THOMAS. Is that about an average loss, no more than 15 percent?

Mr. HARDY. That is right.

Mr. THOMAS. In other words you will have about $4.5 million loss on the 20,000 units?

Mr. HARDY. That would be more like $20 million.

NONADMINISTRATIVE SALARIES AND EXPENSES

Mr. THOMAS. Mr. Reporter, will you put in the justification pages J-1, J-2, J-3 and the table J-4 and the table on J-7, the workload, and J-10.

(The justifications follow:)

FEDERAL HOUSING ADMINISTRATION NONADMINISTRATIVE EXPENSES

AUTHORIZATION LANGUAGE

"LIMITATION ON ADMINISTRATIVE AND NON ADMINISTRATIVE EXPENSES,

FEDERAL HOUSING ADMINISTRATION

"An additional amount of not to exceed $350,000 shall be available for administrative expenses of the Federal Housing Administration, and an additional amount of not to exceed $5,000,000 shall be available for certain nonadministrative expenses of said agency as classified by law, both amounts to be derived from the same source as amounts otherwise provided for such expenses."

Summary

Available, independent offices appropriation bill, 1962 (H.R. 7445) $59, 650, 000 Supplemental, H. Doc. No. 217, for administration of new insurance programs authorized by the Housing Act of 1961..

Revised estimate____

Nonadministrative revised requirements, fiscal year 1962

[Dollars in thousands]

5, 000, 000 64, 650, 000

FISCAL YEAR 1962 SUPPLEMENTAL ESTIMATE OF NONADMINISTRATIVE EXPENSES

The nonadministrative expense increase is directed mainly toward increasing processing staff and facilities in the FHA field offices, as indicated in the accompanying tables: (1) Unit applications to be received, and (2) Determination of personnel requirements.

It is pointed out that the $5 million increase in expense brings the new estimate 8.4 percent above the level of the pending appropriation bill as amended in the Senate and 24 percent above the latest estimate of 1961 expense. In comparison, the total unit-application volume is expected to be 17 percent above the last previous 1962 estimate, about 37 percent above the 1961 actual, and 24 percent above the seasonally adjusted current rate. Insurance claims to be received in 1962 (25,950), added to the unprocessed claims carried into the year (10,435), total 36,385, or 91 percent above the 19,077 processed in 1961.

In estimating the volume of insurance applications for each existing and new program, consideration has been given to the availability of mortgage money (private and FNMA), the general level of housing demand, the more specific backed-up demand in urban areas to be made effective by the new programs, and the general stimulating and facilitating eflects of the numerous liberalizations in existing programs. To the extent possible, allowance has been made for the compensatory shifting of workload from old to new programs and, to some extent, from one to another of the old programs as a result of the altered terms and conditions in the new act. Thus, an attempt has been made to anticipate decreases in certain categories as well as the increases that the law was intended to bring.

Current rent commitments amount to $2,700,000, and present plans to acquire additional space for 500 new employees will raise the current rate to $2,882,000. The supplemental request provides for space for another 400 employees (Washington and field) at a cost of $60,000 for 1962.

The 5-percent increase in full-time employment is expected to raise communication costs by 2 percent.

Other services:

The assignment of 85,000 additional cases to fee appraisers accounts for the $1.7 million increase. This item has been referred to earlier in the justification. The increase of $7,000 for "Other" is related to the estimated increase in full-time employment.

Equipment:

Presently available_

Revised estimate..

Increase...

This increase will be needed to equip about 500 new employees.

$585, 000

785, 000

200, 000

Mr. THOMAS. Gentlemen, have you any questions on this? Mr. JONAS. Is this table on I-6 a complete summary? It shows total personal service presently available, 8,087 people, $53,736,000. Mr. HARDY. That is right.

Mr. JONAS. You want to increase that to 8,634 and the dollar figure of $56,649,000?

Mr. HARDY. That is correct.

Mr. JONAS. I do not understand the need for the 70 new people in Administrative Services. The total shows that you have availability now for 1,105, without any additions, and you have only 995 on board, which leaves a surplus of availability of 110 that you haven't been able to employ. Yet you want authority to increase that by 70.

Mr. HARDY. No, sir. Actually the 1,105 is presently available on the basis of 1962 Appropriation Act, which became law only last week; so in 2 weeks' time this figure will be substantially increased. We have been recruiting, but not putting people on board until the appropriation act went through.

Mr. JONAS. Over and above what you have now which is 997, you want to go up to 110 plus the 70?

Mr. HARDY. The revised estimate figure will be 1,175, compared with 997 now, on the rolls.

Mr. JONAS. That is all, Mr. Chairman.

ANNUAL CONTRIBUTIONS, PUBLIC HOUSING ADMINISTRATION

Mr. THOMAS. Next we shall consider annual contributions, Public Housing Administration for which you are requesting $5,350,000 for 1961, as contained in House Document No. 210. Mrs. McGuire, we are delighted to have you with us again.

Put K-1, K-2, and K-3 in the record.

(The justifications follow:)

PUBLIC HOUSING ADMINISTRATION-LOW RENT PUBLIC HOUSING Program

APPROPRIATION LANGUAGE

"PUBLIC HOUSING ADMINISTRATION

"Annual Contributions

"For an additional amount, fiscal year 1961, for 'Annual contributions', $5,350,000."

Summary

Available, Independent Offices Appropriation Act, 1961 (Public
Law 86-626) –
Supplemental, H. Doc. 210, to meet obligations incurred pursuant
to law....

Revised estimate...

$140, 000, 000

5, 350, 000

145, 350, 000

JUSTIFICATION

An additional amount of $5,321,952 is required by the Public Housing Administration to meet fiscal year 1961 obligations for annual contributions.

These contributions are made to local housing authorities under the authorization contained in the U.S. Housing Act of 1937, as amended, and in accordance with contracts between the local housing authorities and the Public Housing Administration. In each case, the liability of the Federal Government is incurred for a fixed period of years upon execution of the contract, which provides for the payment of annual contributions in amounts sufficient to meet interest and amortization requirements of bonds or other obligations issued to finance the development cost of the project, less any excess of project receipts over operating expenses.

The Independent Offices Appropriation Act, 1961, appropriated $140 million for this purpose, based on an estimate of $146 million prepared by the Public Housing Administration in September of 1959.

Estimates of annual contributions requirements for any given fiscal year change periodically as the source documents on which they are based are updated in the light of actual experience. The principal factors causing these changes are (1) changes in estimated development progress which cause projects to become eligible for their first contributions in an earlier or later year than originally estimated, and (2) changes in the amounts available to reduce contributions. The fiscal year in question (1961) having now been completed, an actual statement of requirements is available. This figure is $145,321,952, or $5,321,952 in excess of the amount already appropriated. In submitting the original request for a supplemental appropriation, this figure was not yet available and the estimate at that time was rounded to $5,350,000.