Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-06-14
FREER LENDING |SA
BUILDING STIMULUS
Renewed Cooperation on Part of
Institutions Is Help to
Construction.

Further evidence of renewed CO.
operation between large mortgage
interests and builders. lack of which
for some time past has checked the
progress of construction on a large
scale, result largely due to efforts
made by INSCRIPTIONS spectators to
place loans unwarranted by ap-
praisals. has been a recent feature
in building circles" says the Ameri-
can Architect although holly as
sailed by this type of builder. who
claims he will be driven out of BUSH
continues. there is sound reason why
lending institutions have hesitated In
furnishing construction funds on first
mortgages as freely as before the war.
The responsibility for an increased
cost of lending capital can be directly
The scarcity of available. funds held
by the title and life insurance COM
panies and savings banks after they
absorbed large part of all govern
ment issues has made for an expected
rate of per cent, and with il comes
a closer scrutiny of all projects on
which money is advanced.
1T is only short time ago that the
speculative builder could get a bank
to accept the appraisal of broker
whose connections might not be of
the best only for the bank to find
been loaned on the project. Evidence
of this is to be found in many cities
where lending companies have had
to take over title to considerable
property that had been overappraised
to such an extent that the speculator
was willing to turn over the property
to the company for the face value or
the mortgage.
''Since the war this state of affairs
has undergone decided change for
the better. Additional safeguards
have been taken by the mortgage in
stitutions to guard against the repre-
hensible methods of unprinciplec
spectators. Appraisals have been
put in the hands of competent men,
the amortization clause placed in con-
tracts and other precautions taken 10
enable operators to judge their equity
with more certainty and to allow
building to proceed on more normal
basis:
1.-THE effect of the feeling of mis-
trust on the part of the banks in tho
larger cities was unfortunately re-
f1ected in the smaller municipalities
intentioned builder or the man who
desires to construct a new home has
had to bear the onus and pay the in
creased rates on loans The moral
hazard in transactions of this nature
is as pronounced as in fire insurance,
the placing of loan. 1t is not just
that the smaller investor shall suffer
for the suspicious that are rightfully
directed against certain classes of
speculative builders, who use ques-
tionable methods to finance their
projects, and shall. have to pay a
premium that ordinarily he would not
be asked to give.
1.-The banks and builders are now
cooperating with the net result of
getting construction started on a large
scale. The need is for new houses and
confidence makes their construction pos
sible. The thing needed now is action In
carrying through the plan. One large
New York title company this week
reported lending from 100000 to
$2.500,000 in the metropolitan district
in May. Other companies similarly
active are helping the situation ma
terially.
"A wide variety of construction was
noted among projects which came to
architects offices during the week.
Theaters had a leading position. Some
complaints were heard regarding the
difficulty of obtaining sufficient labor,
and it is expected that the situation
will become more acute before the
summer is far advanced. Material
prices are nolulns urn IN al markets,
with a tendency upward in lumber
and brick to the consuming trade.
Reports from the American Archs-
tect's correspondents this week show
construction conditions to be growing
better daily. particularly in the mid
west section, where conditions have
been such as to make 1t imperative
that building proceed. The wave has
slowly but surely been moving east
ward. New York architects feel that
1t Is only matter of a month or sc
before there will be great shor.-
age of draughtsmen to handle the
tremendous amount of work"