Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1916-07-27

or the loan has run for n period Of FIVE
years on any insallment due after FIVE
Years from the making of the loan the
entire principal of the loan may be paid
under rules and regulations prescribed by
the federal farm loan board.
RATE OF INTEREST.
"The rate Of interest, cxclusveof amort-
ization payments shall not exceed six
per cent on any loan, and in no case shall
II exceed a rate of more than one per
cont greater than the interest rate of the
last issue Of farmland bonds sold by the
farmland bank of the district For illus
tration. IL the last issue of the Landmark
bonds sold at n rate of three and one
half per cent. per annum. the rate on the
mortgage to the farm borrower could not
then exceed four and one-half per cent.
per annum.
"No loan shall exceed so per cent. OF the
value of the land mortgage and 90 per
cent. of the value of the permanent in
sured improvements. No loan shall be
made to any person who is not at the
time or shortly to become engaged in
the cultivation of the farm nortgayed. In
case of the sale OF the mortgaged land
the federal land bank may permit the
mortgage and the stock interest Of the
vendor to he assumed by the purchaser.
In case OF the death of the mortgagor,
his heirs or his legal representatives have
the right, within co days after his death,
to assume the mortgage and stock in
terest of tho deceased.
POWERS or LAND BANKS.
Every federal land bank is given, among
other powers, the power to issue, subject
to the approval of the federal farm loan
board, and to sell farm-loan bonds to
invest such funds as 1t may have in the
purchase of qualified first mortgages on
farm lands located within the federal
farmland district within which IT is or
ganized or for which 1t is acting. and to
acquire and dispose of such real or per-
sonal property rs may be necessary or
convenient for the transaction Of its bust
ness"
Only stockholders can deposit funds
payable on demand: the bank can trans
act only such business rs the act author
ICES: and It's farm-loan bonds must not
exceed ~ times the amount of its capital
and surplus. II an association has not
been formed within n year, and seems UNI
likely to be, the federal farm loan board
may substitute as an agent "a duly In
corporated bank, trust company, mortg-
age company, or savings institution
cha TT cred by the State in which II has
lts principal office
Distinct from the federal system OF
farm land banks joint-stock land banks
may be formed by 10 or more persons tc
70 ~
sue farm-loan bonds. These are private
profit sharing institutions They must
each have a capital Of $4,000 or more
The bonds each issues must not exceed Il
times it's capital and surplus. The inter
est charged must he not more than one
per cent more than the rate charged or
the last series of farm-loan bonds ISSUED
/ by the bank.
/ Such federal land banks and nationa
| farm loan associations are subject only
! to taxes on real estate held. taken or uset
I In their regular business First mort5
ages and all farm-loan bonds are
held TO be instrumentalities Of the fed
eral government"
SECURING A LOAN.
A borrower secures loan by becomns
member Of a national farm-loan asso
citation or through an authorized agent o
the federal farm loan board, if such al
association does not exist In his com
munity n year after the passage Of this
bill Application is made 70 the secretary
treasurer Of the association. The appi
cant agrees to take five per cent of thu
loan In stock in the federal land banl
of his district. The application describes
the premises and recites the purpose o
the loan desired The associations LOAF
committee examines the security offered
appraises It and. if the associations boar,
Of directors approves. makes the loan t.
the applicant who becomes a member o
the association. Take for instance a trac
of land worth s1,6o0 with improvement
worth $1,000. The applicant woulG be en-
titled to loan amounting to ~ per cent
of the value of the real property and .
per cent. of the value of the improve
ments: total, $1,000 He would then ex
ecute a mortgage for that sum TO the fed
eral farmland bank and would receiv
from the association sl,o00 minus cost O
appraising land, recording fees. cost o
abstract of title and five per cent of tn
loan which would be applied to buy stoc
in the farmland bank, stock TO be hel
by the association as part security 70
repayment of the loan but to pay divi
dends; total to be deducted, s72 Consider
ing the stock an investment, he get
$3.50 cash at an approximate cost of S22.
Repayment must be made in not les
than five or more than 40 years in annuf
instalments. "Anannral installment OF 81
year would mature a loan Of 81 600. bear
ing five per cent in crest. in n little owe