Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-09-02
Cooperative Loans
for u. S. Employees
To the Editor of The Star:

10 the Editor OF Inc star:
Speaking as one who has passed
through the milf as borrower on
real estate at Washington, D. C., |
would like to add my word TO that
of l.. s. Perkins in regard to moder-
ate priced homes for Government en-
ployes. When I moved to Washing
ton from New York a few years ago
having travelled largely through Diff
ferent countries of the world, l was
impressed by the superior class OF
men and women who are working
for Uncle Sam.
I suppose the Civil Service lequlre-
ments demand a higher grade or IN
telligence, and while Government OF
ficials and clerks are the most poorly
paid class of people in this country,
they seem to take certain PRIDE IN
their work, to feel that back OF them
after all is the unfailing strength
of the Government of the greatest
nation on earth.
For this reason they should not De
exploited by unscrupulous money
lenders and pay extortionate COM
mission and interest, If they are
struggling to own their home.
The longing for place to call home
is deep in most peoples hearts. In
order to have one they listen to the
siren song of the real estate salesman.
who only wants his commission ana
who tells them how easily 1t can be
done: Just small payment down,
$500 or 81, 1000; the rest can all be ar
ranged; a first trust at s per cent,
sometimes more, on a $4,000 house.
which means only 5000 per year. $50
month. That looks easy and one
thinks he is paying on a home. in
place of giving it to a landlord. But,
in addition to a $4,000 first trust and
a cash payment Of $1,000. there is O.
$4,000 second trust. That is where
the trick is played.
A second trust of $4,000 may be
paid in PAYMENTS of, say, $40 per
month at Z, sometimes 8, per cent
interest, but there must be commits
sion or bonus Of from 10 to 40 per
cent, which is divided between the
seller and money lender. They well
know this is illegal and it does not
appear in the final papers, but they
will tell you that is the way it is done.
The interest on $4,000 at per cent
is $3.50 per year. Add this TO the
$500 interest on the first trust and
you are paying $3.50 per year. a fair
rent for an eight-room house. But
the taxes and water rent must be
added, which, with the commission
or bonus, will make your home cost
you ten or twelve hundred dollars a
year. How much are you paying on
the principal at $45 per month? But
this is not all.
The first trust may run for two or
three years, then it must be renewed
and commission of from to 10 per
cent paid for the renewal.
Your second trust may run for only
one year, the idea being to make the
buyer pay another bonus of from 10
to 40 per cent for renewal. When
this is done, all that you may think
you have been paying off in the prin-
cipal is eaten up in the bonus. 1t is
not intended that you are to come out
ahead
1t is a vicious practice and not used
anywhere, to my knowledge. except
at the Capital of the United States.
Sometimes there is third trust, for
which much more must be paid, and
God help any one who is trying to
buy Il home under these conditions!
Their hard-earned money is being
swallowed, hook and line, by money
lenders, and this is allowed to go on.
While the administration is look
ing into other illegal conditions at
Washington, why should this crime
against Government employees not be
looked into. also?
Mr.. Perkins has explained things
pretty well. Barracks" is the right
word 1t is humliating to independ-
ent Americans to feel that they must
be compelled to live, cook and eat In
one or two rooms. when the whole
wide, beautiful country lies waste
calling to little children to come and
play away from the city streets.
Home means a haven, a place Of
rest and privacy. which is never to
he found while cooped in tiny tene-
ment.
The plan of cooperative loan
company, owned by the Federal en-
ployes whereby one may borrow at
per cent without having to pay
bonus" and see their way toward
finally owning a place Of their own.
where they may sit on their own We
randa after the work of the day is
done, breathe pure, free air, have
some flowers and a little garden if
they like, will be greater thing for
the family and make life really worth
living, not merely a hopeless exist
ence. MARY REID UMSTEAD.