Bank Board May Give Away Unsold Land

Federal Home Loan Bank Board may give away land it can’t sell in Texas and other hard-hit real estate markets just to get the property off its hands, Chairman M. Danny Wall said Monday.

Before such a radical step is considered, Congress will have to give the bank board adequate resources to handle the crisis in the savings and loan industry, Wall said.

Record S&L; failures since the early 1980s have drained the bank board’s resources and left the agency holding at least $14 billion in homes, shopping centers, vacant land and other property. Once Congress and the White House decide how much money to provide to close or merge hundreds of additional ailing S&Ls;, the agency will have enough cash to absorb the loss from giving away land it cannot sell, Wall said.

Giving away land might seem extreme, Wall said, but the amount of real estate in the government’s hands has grown so large that the idea is an attractive alternative to the cost of holding the property and trying to sell it.

During an interview, Wall also said he shares a growing concern in the home-lending industry about “suicide loans’--adjustable-rate home mortgages that S&Ls; are offering at such low rates that they may never earn a profit. According to estimates by the Mortgage Bankers Assn., at least half of the adjustable-rate loans being made by S&Ls; “result in a long-term loss.”