The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-01-02
MARKET
REALTY'S WEAK POINT
Continued from Ftfth Page.

| figures vouched for by the Interested
persons the loan represents only 40 per
cent. Of the value. and on that basis
It IL not remarkably cheap. For the rest
of the inancing the owner OF the land
probably goes behind with a large sum
at perhaps 51a or 6 per cent. making
the average rate OF interest from 5h
to 5h per cent, which is the rate OH
most oan made during the last year.
OF Az per cent. mortgages there
have been about "A dozen during the
last two months, as against about
twenty during the same period In 1914.
The amount in both years were about
the same. At the higher rates of In
terest the number and volume of loans
recorded during the last year have
been 80 close to those of 1914 that to
And great improvement in the mortgage
market would be a difficult task. Dur
ing 1914 a total OF 1000 mortgages
were recorded In Manhattan for a total
amount of $3.50. 000. 900, while last year
1850 oans were recorded for a total
OF 500. OO0. 900. h insignificant sup
port the mortgage market has given
real estate can best be realized when II
Is stated that In 1912, which was con-
sidered a remarkably poor real estate
year. 5000 mortgages were recorded.
but OF course that included Manhattan
ana Inc BrOny 1OT II tOtdt Ot SsSv'-
O00, 900. and in 1906. the banner year.
the figures were 10000 mortgages for
a total of $475. 0o0. 1000. In 1915. last
year, Manhattan and The Bronx to-
gether obtained 5000 loans for the
small total OF s1S5. 900. 900. or less than
one-half OF the 1912 total.
II was Just one year ago that real
estate men were crying down city Off
Gals because OF the 500. 900, 900 loan
l rlncat nv tho CitN at "a X npT cent rate.
which many declared would be taken
from channels which ordinarily flowed
into real estate loans. What, then. Is TO
be said Of the recent Anglo-French loan
for $500. 900. 900. most OF which was
subscribed for right here In New York at
prices which will net the investors
nearly 6 per cent" II is not TO he
doubted that real estate has suffered to
a great extent from the marketing Of
the bonds on which that loan Is based
nor is II TO he doubted that other great
foreign loans will be made to take more
money from It's legitimate and ordinary
pursuits during the next year or two
With such investment opportunities real
estate canno compete. for the normal
rate for real estate loans is : per cent.
and 6 per cent. comes near TO being
prohibitive.
The present seas son Is one OF unusual
opportunity for those institutions that
are restricted by law in their invest
ments. Those that can make real es-
tate loans find that they can obtain bet
ter rates than ordinarily and are taking
a comparatively larger amount Of tho
total business than for n long time past.
One of the features of the current mort.
gage lending is the largely increased
number and total amount ~ loans made
by banks and insurance companies.
That the lending institutions view the
q - - -. "a. .-. - II ID.
In the recent attempts to force amortiz-
ing mortgages on New York city. II is
not to be denied that in certain condi-
tons and under certain circumstance
} repayment loans are TO be desired, and
that in the long run they will he TO the
, advantage OF all who W mortCaged
; property. Though protection of the
= lender was said to have been the theme
at the recent conference of lending In
; stitution officers over an amortizinc
: plan. 1t might possibly have been added
that another reason for working out a
= repayment mortgage scheme was the
inability OF these institutions. or many
( OF them. to find money to lend. Lend
ing money on real estate with all II,
modern ramiications is good payinl
business. and If some of the institutions
that have many millions out on bone
and mortgage could now collect ! pc
cent. annually and relend IL their profit,
would be materially greater.
I The plan for amortization which prob
ably will be put into operation durin,
the present year originated with tn,
Y lending institutions and not with Dor
r rowers. or the latter class there ar
& many who would have availei them
selves of such a provision had lender
heretofore looked with favor on the idea
= The big companies have waited, how
ever. to consider such a scheme until
time when their own Mistakes. comm
back to them in the form OF prop
critics taken in foreclosure, they hav
fastened upon a plan whereby they a.
eat their cake and have il. The fcelin
., Is widespread that had these institution
- been guided not only by law but b
y reason as well their loans would nc
have been 80 out of proportion to prop
erty values as 10 have caused the grel
readjustment recently seen in the fore
re closure sales. What many persons cor
'e slider equally as good as amortizin
Re loans Is State supervision OF savings ban
n and institutional loans. They declar
10 that the law Is too loosely drawn an
N that It can be stretched 10 almost an
ID extent. Evidence 10 justify this belle
lie Is not lacking In the records of force
II sales during the last year ar two. Pc,
d. haps a combination OF amortization an
Is State supervision Ia the best plan. &c
70 under II protection would he offered
all concerned.
l.. During the coming year speculatoi
n. and speculative builders who are az
M customed to operate entirely on borrowe
:. capital probably will find difficulty /
N financing their operations. for the lender
are known to be most favorably incline
=, toward them are those whose funds seei
to be at the lowest now. II has bee
-, demonstrated however, that there
III always plenty of money for sound "
* vestmeht propositions In this .city whei
Ell ever they appear. and there is no doul
~ that money will continue to he availab
)n for such business. 1t II to be hoped III;
nd during the continued period Of quit
TN which seems to be the lot OF real esta'
de while the European war takes the none
ny needed here those lenders who. throuc
RI. their favorltisn and poor judgment
the past helped to precipitate the la
he few years OF inactivity, will live dow
ty their past deeds and place New Vol
a. real estate on a firm financial basis.
ne Wallet stops Knife Thrust.