The Lake County times. [volume] (Hammond, Ind.) 1906-1933, 1921-03-19
MONEY
LENDERS
INNINGS
Prominent Bankers Give Their
Evidence In
Case
FACTS ESTABLISHED
BY BUILDING QIIz

BY BUILDING QtIA
SESSION no. Millions of dollars ot
building construction includ.ng
public buildings, business blocks
and residences are being held up
because building costs are con
sidered prohibitive and building
conditions unfavorable.
SESSION no Interest rates on frsi
mortgages and mortgage bond s
sues are uniformly seven per cent
with a commission Of TWO and on
half per cent to cover expense cf
making and re-selling The loan.
Building and loans charge eight
pcr cent. Second mortgage loans
are an outlaw proposition eugas-
ed in by outsiders at whatever
rate Of interest they can get. In
teresu rates on first mortgage
loans have not increased appreeia-
bly, and are not excessive.
Next session Monday evening. r. Sill
Building material costs and real
estate costs.
At last evenings. session OF the joint
Investigating committee or building
conditions the bankers and money
lenders had their innings. Promintut
among the speakers was Fred Sniih
president Of tho First National Bank
OF Whiting, and interested in sen ,,st
other banks, W. C. Be'man. presidc1t
OF the Hammond Bundins Loan and
Savings Association, l.. J.. B1mberser.
member Of the Hammond Board oi
Education
The bankers present seemed TO sense
the inferential charge that they nave
been pronteering in their interest
charges on building loans. Their an
swcr to this charge was that builG3ng
and loan associations have not I'M
creased interest chsrges IN thirty
years
" e., Belman vice president ot tns
First National Bank Hammond. stated
that on every seven per cent loan the
bank made il lost ono per cent for the
reason that thcrc was plenty Of FIRST
class corporation bonds that could he
purchased that would bear eight and
even nine per cent.
SECOND MoRTC AGE RATES HIGH
The statement was made ny scvelsl
speakers that from - to 90 per cent
was charged on second mortgage
loans. Then tho fact developed thar
national banks, trust companies, build
ing and loan associations and ife in-
surance companies consider the Sec
ond mortgage business as out or the
realm Of their activities and look up
on it as being little above the chattcl
mortga business.
No constructive statements were
made as TO what Gould bc done &c
bridge the gap between tho 60 per vsar
FIRST mortgage loan and the cash pay
ment made by tho average purchaser.
ManifestIy the professional builder
Of small resources would soon exhaust
l..
the equity over and above the first
mortgage loan and the usIIal $4,000 to
100000 cash payment made by tine
purchaser. After building few
house he would be done.
Hence the solution Of the problem -
financing buiiding lies largely in pro-
viding second mortgage money and an
fortunately the meeting did not bring
out any constructive suggestions alcns
this linc.
SMITH BANKS on CHARACTER
An interesting statement was made
by Fred Smith o. whiting fie stated
that he was engaged iu three branches
of tho business Of providing homes fer
people; the real estate business
through Smith-Bader- Davidson Co. the
banking business through his various
banking connections and the material
business through his interests iu a
lumber company,
Hc stated that for thirty years he
had becn building homes in Whitine
and Robertsdale and selling thcm on
payments that averaged $500 oo. T3e
said shat where the moral or chara ctcr
risk was good hc had sold houses Tor
St0o.oo and 100000 down. IL, said he
carried tho builders equity hUnsclr
AS result of his rNprrfence nc sa ii