Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1889-02-24
COOPERATIVE PLANS.
The Building Association of the Fu-
ture to Insure Life and
PROTECT LENDER AND BORROWER.
The East Adopting the Plan and the Leg
islatiOn on the Subject.
PROTECT LENDER AND BORROWER.
IT FAILED IN PITTSBURG YEARS AGO
rMRTTTEN FOR THE pIsPArcHl

a
on How to Get Along" / indicated in
general and desultory fashion some of the
various ways and means" by which
building associations might be improved
Such associations are both protest agains
the insecurity Of savings banks and sub
stitute for them, combining greater safety
and economy in their methods and results
But with all the advantages of these asso-
Citations, and no one admits them more
freely than L do, they are not without some
very material drawbacks, and my purpose
in these observations is to induce the build
ing associations of to-day co hold fast, I"
in the words of the Apostle, "to that which
is good" and improve as far as possible
on the past. l start out with this PROPOSE
tion, that these associations are susceptible
of improvement. l can easily recall in
stances in the earlier days of some of these
associations in Pittsburg where the dl-
rectors purchased large tracts of land and
sold the same to the associations which they
were apparently directing" thus intro
ducing the Jay Gould Construction Com
pany methods into what ought to be purely
mutual beneficial associations Time and
experience have educated the stockholders
of these associations, and such speculations
would hardly be permitted at this day.
days of these associations. They were fair
weather concerns Like the light-draught
shaliops of Columbus. they we're not de-
signed to stand heavy sea. They were
not constructed to meet storms or panics, or
conditions in which the member for lack of
regular work was
UNABLE TO PAY
his regular dues. If he was non-borrower,
L. rbl 3ba
'dark clouds gathered, but if he had bor-
rowed and paid say, one-half or one-third
on this humble home, it was very
different thing. When the borrowing
member failed to pay his dues the
association had to protect ITSELF
When it became a question whether
the association should lose or the DELINQUENT
member, it soon became evident that this
mutual association was almost as stony
hearted as banks or other corporations, and
exercised its foreclosure rights as matter
of self preservation.
1t was apparent that such associations as
generally operated at present, were adapted
to flush times. They do not thrive when
their members are out of work, and thus
the strength of the chain is no stronger than
its weakest link. But lack of employment
is not the only test of these associations.
Suppose the borrower and "home builder"
gets sick or dies. What then? The case
at this juncture is like that Of the old saltwho
fell overheard. The spectators on the dock
suggested, ,one rope, another plank, while
the salt elevated his head for a moment
to remark that something had to be done
d. quick" If somebody does not step
into the unfortunate's shoes as "due
payer" the something" that ensues
pretty quickly is something that sounds
very much like the word foreclosure. The
association looks out for No. l, and the
member goes to the wall.
All this is preliminary to the observa-
tion that associations of this kind, which
have to take the times good and bad as
they come, should be adapted, so far as hu-
man prudence can do it, to protect its men,
bers in good as well as bad times. There is
probably no efectual remedy to protect
defaulting member against his own default.
The association must have dues, for with
out dues" it must cease operations.
THE EASTERN IDEA.
In the East some attempts have been
made in real estate associations to lessen
the hardships of members default in this
way. Part of the agreement is that if the
member, from any cause, becomes embar-
rassed and unable to meet his payments.
then instead of being sold out by the sheriff. |
and the accumulations of years, perhaps,
swept away, and to prevent arbitrary legal |
proceedings and the undervaluation of |
property caused by forced sale, the entire |
accumulation thatmay have been originally |
intended as purchase money will be drawn |
upon, and applied as rent until such accu-
mutation becomes exhausted, when the |
property will revert to the company or socle-
ty without loss or expense to either party.
nj this n1ou fbonOh 80 1o+b
parties, is not without some drawbacks |
What, then, is the true remedy? Obvi- |
ously a combination of the life insurance
with the building association features. The
building association of to-day very properly
insists on fire insurance policy to protect
what? Its mortgage investment. But the
member without life insurance policy has
no certainty of protection for his invest
ment in case of death or sickness. The as
sociation protects its interests by insurance.
Why should not the member protect his
interests in the same way? Is there any
fair answer to this, but one?
In the East the tendency is strongly in |
this direction, and where building associa-
tions fail 10 adopt it, the trust companies
have taken their place and much of their
The building and life insur-
ance features are combined generally with
these provisions:
WHAT THE BORROWER CAN Do
If the borrower finds that his income is
inadequate to meet his payments be has the
option of changing from a shorter to a
longer period, thus making his payments
lighter and overcoming what under other
arrangements lead to foreclosure of mort
gage.
If, on the other hand, an increased in
come justifes him in making larger pay
nents, he can shorten the period originally
agreed upon and complete his contract in
less number of years, thus saving big inter-
est.
Or he may terminate the contract at any
time by paying the present worth on a per
cent basis af all the deferred annual install
nents
0r,.in case of death the mortgage is can
seled, the property reyerting to the borrowers
heirs in fee simple.
Take an ordinary illustration of its op-
9ration: A person aged say 30 wishes to
1uy only s., 900 home He makes a cash
payment under this system of 1923 GA. and
It the end of a month thereafter begins and
continues his monthly payments as follows:
PRICE OF HOUSE, $1,000.
Age, 60 No. of monthly payments, lS2.
st Yr. ID Yr. 90 Yr. 4th Yr. 9th Yr. 9Th Yr.
SO 20 s22 50 s2i 81 SO 81 sl9 50 s187O