Evening star., 1926-04-03
BY ROGER W. B.iBSON.

BABSON PARK, Fla. April .
When all classes Of investment are
considered, proba bly, local real estate
mortgages have the best record of
any. In saying this. however. | must
emphasize the word local" which
means mortgages in ones own CITY or
town. When all mortgages are con.
Sidered, the percentage of loss is prob.
ably as large as in many other forms
OF investment This is due to the fact
that when money is sent away to dis.
tant cities TO be invested for mort.
cages at high rates of interest, the
percentage of loss is conSidera BILE
Yet 1t is strange how people are VIII
ing 10 take risky mortgages on nrop-
erty that theT have not seen in cities
mat they have never visited, when
they are not willing TO take good mort
cages in their own home towns.
do, however. repeat that losses are
very small on local mortgages, that
IS, mortgages on property in your own
city or town, especially when YOU
know the owner of the property The
only important thing 70 remember
when taking local mortgages is that
YOU should take them on homes in
WHICH the owner lives rather than on
property that Is rented. \ man con
ilnually improves a house in which
he lives if lie Is the owner thereof.
Unfortunately this is moi true in the
case of tenants. BY all means beware
or mortgages on speculative property
unless the margin is very great. Loss
eS that may come on mortgages dur
ing the next few years will be on
houses built for speculation. not on
houses built for the owners use.
Insurance as Extra Security
The one objection to haVin2 mort.
gage on "A home is thu disugreeable
feature of forecloSing in case the
owner is permanently disabled or dies
suddenly in debt. Ii is always an un-
pleasant thing TO forecIose a house.
especially as the event is usually in
connection With the sudden death or
accident which of itself is unfortu.
nate.
This becomes all the more awkward
when the home is that of a friend or
relative. This accounts for the prov.
erh among mortgage brokers. Go to
strangers for money, friends for ad.
vice. and your relatives for nothing
On the other hand, this disadvantage
10 local mortgages on homes can be
well taken care of at low expense bv
insurance polio es. Hence when TAX
ing mortgage on 3 home. unless the
'WHei mas NIUE nest egg. | advise
that the owner be requested 10 take
out an insurance policy to the value
of the mortgage and deposit this q :
additional security.
Such an insurance policy does not
cost much. and is really a splendid
thing for all concerned. Then. if the
owner dies or IS permanently diSa bled.
the insurance policy will take care of
the mortgage and the house can be
turned over free of any indebtedness
10 the widow. In a previous article
advised against the hypothecat.ng of
insurance policies for debts. and I still
teei that way concerning insurance
policies which were taken out for the
protection of the family. stated
however, that there are exceptions.
and here is an exception case
where the insurance policy is taken
out, not TO buy an automobile or to
open grocery store, but to protect
the mortgage on the house
III you have never taken a local
mortgage, perhaps the easiest way is |
10 tell the treasurer Of your local bank |
that you would like to loan a certain !
amount OF money on home. and state
he amount. or course the banks best