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tarypingtionilize*d a DansDiith)un-runpro-entscaseerg-Solons lo CheckMilitaryIn FHA Probesthatarebout:ers.By ROWLAND EVANS JR.WASHINGTON m — The Senate Banking Committee today turned to the 1950 military housing law in its hunt for irregularities in the government’s many - sided housing program./The committee, headed by Sen.■\?ne I Capehart (R-Ind), summonedttionnar-three builders who shared in a reported one-million-dollar profit in construction of the Page Manor project near the Air Force baseI at Wright Field in Dayton, Ohiog toerv-/ the rec-Also, ipact kingleal-rivalarlyfor the ort-•ket-lv 1 07 Vit ondue ision ?arly falfa Also, ality sased re-is inairedhar-:ropsin-vhileands.: hay hay, was thisfrom d at ohn-t $27ablesiwestheattheAgri-lucedcon-i less :h inTh • builders were identified as Link Cowan, Shawnee, Okla.; David Muss, San Antonio, Tex.; and Norman K. Winston, New YorkCity.The military housing program, commonly known as “Wherry Act” housing after its author, the late Sen. Kenneth S. Wherry (R-Neb), was designated to stimulate construction near military centers. It operated in much the same manner as the much-probed general postwar apartment program, which provided government insurance , for loans to builders, with one significant exception:Builders of military rental housing worked under a provision which required them to certify to the Federal Housing Administration that their costs of construction were more than the amount of their FHA-insured mortgage. The mortgage was supposedly available on 90 per cent of building costs.VDienurhalt;horhache?shebeeBleentbeitheTSGiisheinda-**ersEnheiMoMoCGiikinwhmaiderecinhe]meMcoleiw!okra,haCO]he (thlt; fu« dieUnder the general program, now ^ expired, no certification was re-quired. Capehart estimates that under this section of the law builders reaped up to half a bil- ^ lion dollars in “windfall” profits by pocketing the difference between the logn amounts and actual lower construction costs.One committee source, asking or not to be quoted by name, said hi that despite the certification re- ]0 quirement, builders* profits were it substantial in the military housing se program. which is still operating, w The profits were possible, he said, th by a two-corporation device which would work like this: ccCorporation “A” would get the la FHA-insured loan and corporation “B” would do the actual building, m When the proiect was completed, p* corporation “B” would charge cr “A” the full amount of the mortgage as construction costs, even f0 though costs were actually less. n( Then corporation “A” could certify to the FHA that all mortgage sc proceeds were needed to build vi the project. WThe gimmick was that stock- m holders in corporations “A” and ai “B” would be substantially the rr same, the informant said. di
Newspaper Details
Ardmore Daily Ardmoreite
Ardmore, Oklahoma, US
Mon, Jul 19, 1954
Page 1
Full Page
Clipped by
Jere H.
NA, 01 Mar 2022
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