Armstrong, 091433 PAAGO, AGO 92

Case DateSeptember 14, 1933
CourtPennsylvania
Honorable Charles F. Armstrong
AGO 92
Opinion No. 92
Pennsylvania Attorney General Opinions
Opinions of the Attorney General
September 14, 1933
         Home Owners' Loan Corporation Bonds—Sight of insurance companies to invest in.          Life insurance companies, fire insurance companies, marine insurance companies, fire and marine insurance companies, and casualty insurance companies, whether stock or mutual, as well as fraternal benefit societies, are not authorized to purchase bonds of the Home Owners' Loan Corporation as investments, but they may accept them in exchange for mortgages upon real property in any case in which, after an independent study of the particular facts involved, they deem such action to the best interests of the companies or associations.          Honorable Charles F. Armstrong, Insurance Commissioner, Harrisburg, Pennsylvania.          Sir: We have your request to be 'advised whether life insurance companies, fire insurance companies, marine insurance companies, fire and marine insurance companies, and fraternal benefit societies may invest in, or, accept in exchange for mortgages held by them, bonds of the Home Owners' Loan Corporation.          The Home Owners' Loan Corporation is a corporation organized by the Federal Home Loan Bank Board under the provisions of the "Home Owners' Loan Act of 1933", approved June 13, .1933. Its entire capital, not exceeding $200,000,000.00, is subscribed by the government of the United States. The corporation is authorized to issue bonds in an amount not exceeding $2,000,000,000.00.          The act provides that the bonds shall mature within a period of not more than eighteen years, shall bear interest at the rate of four per centum per annum, and shall be guaranteed by the United States as to interest only. There is no guarantee as to the payment of principal.          The bonds may be sold by the Corporation to provide additional funds for carrying out the purposes of the act, or they may be exchanged for mortgages or other liens upon real property occupied by the owner as a home. The face value of bonds exchanged, plus accrued interest thereon, and any cash advanced in accordance with the provisions of the act, shall not exceed $14,000, or eighty per cent of the value of the real property, as determined by an appraisal made by the Corporation, whichever is the smaller amount. The value of the property, as so appraised, must not exceed $20,000. The mortgage or lien taken by...

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