The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-05-11
EAGER FOR REVISION
OF FARM LOAN.LAW
Loan Associations the Hope
for Home Builder in Pro-
posed Amendment.

The hope of the man who wishes TO
build n home in the country 10 the build
ing and loan association. The hope of
the building and loan associations lies
IN Federal legislation that will permit
them TO borrow on their mortgage Sc
curities.
The builder borrows and gives
mortgage as evidence Of the debt The
building and loan association accepts
the mortgage and holds II In It's vaults
during the process of amortization. II
the mortgage were made legal collat-
eral for loans from banks. the stimula-
tion to building would be enormous.
Building and loan associations Of the
metropolitan district report an unprece-
dented demand for loans. As soon as
Congress meets next winter a bill will
) law to home loans. and II is hoped that
home building in the 1920 season will
be helped by the influx Of many mill
ions In new cash.
The United States League OF Build
ing and Loan Associations is behind
Sthe proposed legislation. Ofiicers of the
league conferred with Secretary Wilson
sof the Department of Labor In Febru-
SAry regarding the housing situation. At
that time the congestion of population
4 was not foreseen New building was
d proposed as a means OF taking up the
s4abor slack which was expected to be
"a rehabilitation phase. own Your
ssOwn Home was adopted as the slogan
eef the Department OF Labor, and pro-
& Vision was made for the drawing of a
Sbill to extend the farm loan law.
- A second conference was called by
&4secretary Wilson last month. Housing
tad become an emergency need. and
S7Gharles O'Connor Hennessy of the
Franklin Savings Society Of New York
t..3~as appointed chairman of the commit
sssstee to redraft the original bill to meet
ss8ew conditions
n The revised bill will provide for
@freasury Department regional home
E8anks which shall accept mortgages on
S9welings as collateral security and issue
fSfonos against them for sale to banks on
Xattractve terms.
81 The plan follows that Of the land bank
Of the State Of New York which. after
, - encouraging start In 1914, became
/. dormant when its bonds were made liable
sato Federal war taxation. The New
York law provided that bonds to the
value OF $50 might be issued against
every 800 secured by mortgages. At
A41is ratio building and loan associations
eSn the metropolitan district might add
HIearly $50.o00,000 to their lending ca
< Hacity.
So Building and loan association mort
kkhe conservative investor. They are al
s,Sfhcst invariably upon small dwelling
x3iouses owned and occupied by members
kt6f an association. They average less
Sthan $4,000. are carefully appraised and
ktEubject to amortization by weekly or
sfhonthly payments.
- In discussing the work of the building
f2And loan associations. Mr.. Hennessy said
Recently that they are lending $1,000, 900
- month within the metropolitan dis
&frict. One institution has made loans
100000 since january
khnd it's average mortgage Is less than
fsf3.5O0.
IS. 1.-THE one element that Is lacking is an
fsedequate supply OF money for mortgage
J loans." said Mr.. Hennessy. The aver
age family of small means would prefer
TO live In an individual dwelling rather
than in a tenement or apartment house
providing II can find site that has
reasonably good transportation facilities.
~ have in mind houses Of which the
total value with land varies from $4,000
to $4,000. An immense field for the con-
/. struction for such houses exists in
{ Brooklyn. Queens, Richmond. The
{ Bronx, the northern New Jersey coun-
ties and Westminster.
THE building OF small houses is de-
( pendent upon the speculative builder to
an important extent, but because OF the
lesser risk involved in mis- operations as
compared with those of the builder of
: tr~-ments and apartment houses, he Is
II getting on the job In suburban COM
. munities.
Ills difficulty for the present is not in
high land values Increases may bar
him from the field later, but at the pres
ent time tens of thousands OF moderately
priced building sites are available. The
high cost of construction may be dis
Cd in OF Ia high nTiCa that
people are willing to give for small
houses and their greater ability to pay
for them"