Omaha daily bee., 1901-02-20
Change is in Loans

One OF the most remarkable changes that
has come over the real estate business In
Omaha in recent years is in the city loan
department
Ten or twelve years ago or a little more,
half the people who owned lot in Omaha,
no matter what its value. had It mortgaged
The mortgages were usually given as
part OF the purchase price and for time
these loans were made at I and $ per
cent net to the investor The rate had
been much higher but on the other hand,
first-class inside business loans before the
end OF the SOS were often accepted
AZ rate little lower than this. On all
these at least per cent additional was
charged by the agent as his commits ion. In
3 large number of cases these loans were
made by trust company which sold the
mortgages TO the eastern investor. gener
ally guaranteeing the payment OF interest
and premium.
When the bottom dropped out OF the
boom the bottom dropped from under these
guarantees also. The next step was the
passing away OF loan companies Those
which put their guarantees back Of the
loans were the first TO go, and those which
made the property the security for the
mortgage have in some cases gone too.
though for different reasons. But these
loan companies had had their day. As
agents they had brought the investor and
the borrower together. though in TOO many
cases both the one party and the other re-
GREETED the transaction later. Out OF the mis-
takes that were made in those days. how
ever. the Investor has learned 10 look more
closely to his security and for a long time
now the business has been on a thoroughly
conservative basis. Mortgages made since
1894 have in almost every instance proved
good. Indeed, II Is only in the very recent
cases that the lender has lost anything In
either principal or interest, and most OF
the loan agents report that they have
never had to foreclose under mortgages
made during the last six or seven years.
BY 1895, or thereabouts. the guaranteed
loans had about passed out Of existence
The agents at that time we're stil seeking
applicants for money and they had TO seek
also the lender for when foreclosures on
old business were common the man with
money-who was not so plentiful as he
is now-wgs keeping In the background.
Desirable residence properties could Elways
be mortgaged up 10 from 80 TO 40 per cen.
OF their value at a rate of 6ia CIR : per cent
10 the investor and the agent was still
able to get a per cent commission These
were en- loans OF from about $500 10 81 600.
on larger amounts. 10 the security were frst-
class and centrally located a lower in
terest was possible. Many OF the best OF
these loans were made to people who took
advantage Of the low prices OF lots and OF
building material TO crest houses either a.
homes for themselves, or 20 rent. or sell
The earlier OF the leans made in thll
period have been renewed. In mary eases
and many more will be renewed this year
part OF the principal being paid, per
hsps. and ia some eases with reduction In
the rate Of interest The loans usually Tur
for term Of i've years. aud the year ls9.
was good year in the city loan business
In Omaha. Consequently there win be many
renewals in 1901.
For two or three years. however. ther,
has been more money awaiting investment
In Omaha city mortgages than can b,
placed. The aggregate of such mortgages