The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-01-30
INCOME SHOULD GOVERN LOANS
Then. says =. ". Straus. Amortiaa.
ton would He Good Policy.

Tina; the proposed amortization o. all
mortgages = based on sound policy
Is the view o. : W Straus lie says
that amortization Of real estate loans
will do much 10 remedy unfavorable
conditions which exist to-day.
The first essential 20 sound and
healthy real estate conditions IL sound
financing aid MIR. Straus. Proper
~riauciIL implies ability to borrow
money readily on any good property.
whether completed o. in course VI CON
struc;ior This necessarily requires the
confidence Of investors and means that
the Interests % the investor IN real
estate mortgage, A. well ~ the interests
o. real estate owners. must he fully
projected. How wll the mortgage Re
raid Is The question tina; naturally IL
most !l the investors mind II the
earnings of IN, property are sutHcen;
20 pay the interest charges and reduce
the principal without calling on any
other resources OF the borrower the
q is an attractive one from the In
vesi"rs point q Nie". providing. ~
course. that :Ne margin - security or
equity protecting the loan Is ample.
j savc found \ CROWNS tendency on
The part % investors all over the pGU
Try - LOOK more and more INTO the
question OF income from real ts'ate o.
vhich they nave loaned Whore the
eAru!ug power j. ample mis- gives the
opportunity 70 reduce the ioan by amor
;ization or some form o; se-iai payment
and thus add greatly - rs safety The
mos; common FORM q amor, zation In
other cities 81 the United States j. the
the use OF serial payments In Chicago,
P~it,sbG'g. Minneapolis, Kansas CITY.
Cleveland and many other cries real
eStat. MORTGAGES are commonly divided
W into bonds. which mature s~erIally IN
annual ius.alnierts, about = per cent ~
the Hr.ocipa. sum being pad of ~ THIS
way every year TINS reduces the prin.
/, ci3al much more b enough To- take
care II any J. Ss.p.e depreciation # the
property or change "a e.Ehborhoo6 y;
The end 81 seven 20 ten wears. when the
loans has been reduced from 80 70 -
per cent. the bulk 90 the principal ma
lures. and X naturally = mu,a easier tor
the real estate owner - take care @.
his 1latar : obi CATION ;haa II hr had
the entire loan maturing N one lump
NOV RICH; here j. IN. point that New
York real estate owners should con-
s.der carefully S.r.al payments or
amortization q tbs Kind necessarily re-
Quirc good income producing properties
and the property that : ouy yIeli.as
= 20 3 Ter cent. or the investment IN =
cannot OF Itself reduce the LOAF that =
: carried.
81: becomes necessary that the value
Of the property should ." 'oiilGsted IN
. lch, Of ,he income derived theretrom.
and owners should realize that Their
property : worth 10 more than its
earning capacity MI Warrant.
"W:s tbs limitation a. - income TIE
crusade :o- amortization ot loans should
p-1v. an -Nce.l.r; solution @. the prob
lem that u confronting New YORK real
estate owners TO-DAY. II j. perfectly
true that owners Of property which =
no; producing q good rental income Wi.
-ot take Kindly 20 amortization. -
..eye that some form O.; amortization
VII Doe literally forced by investors on =
large pat ot the real estate owners ir
New Yo-k cI',. ! do mot believe tAA'
The plan which i~ sometimes advocated
% making long term loans. with a"ror'i.
z.tlpS running from tUert,-HNe 90 'h.r':
years. sI.T a> = cN;umon n Europe
would prove practical here. American
investors in r,a. estate mortgages a.
10, take k.nd'y 80 a thirty year onl.'
CATION"