Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-07
Warming is ISSUED
TO BOND SELLERS
Holders Urged to Learn Real
Values of Securities Be-
fore Making Moves.

Unscrlpulous "Sharpshooters" among
bond brokers have been severely scored
by the Mortgage Bankers Association Of
America through statement Of its board
Of governors.
Likening their operations to those Of
the most vicious bear raiders on Wall
Street, it Is cited that their tactics in
elude every device of propaganda to
lower the prestige of real estate bonds
and coerce tlmid investors to sell their
holdings at prices far below true value.
Reference is made to the knowledge of
the securities division of the State OF
Illinois that certain persons are finding
1t profitable to circulate adverse rumorS
as to the stability of real estate mort
gage bonds and thereafter to pick up
valuable bonds from uniformed inves-
tors in exchange for worthless securi-
ties or for entirely inadequate cash pay
ment.
Reaume's Warning.
1--WE congratulate Leonard P. Reaume,
president of the National Association OF
Real Estate Boards, for the warning to
investors which he recently issued
through real estate boards of the coun-
try" the statement reads. by far the
greater portion of real estate bond is
sues are In good standing, and when
we view in retrospect the financial his
tory of the country over the past decade,
it will be seen that real estate securities
have had less ups and downs than other
investments with comparable yields OF
income. The comparatively few issues
in default have furnished to certain I'M
principled brokers or agents OF buyers
the ammunition for destroying conf
dence in this entire class Of Investments
It is to be noted that they DO not try
to persuade investors to sell or trade
in the securities that are actually IN
trouble; rather, these brokers try to get
hold Of the sound bonds, knowing that
they can dispose Of them easily at a
good profit.
Reciting the fact that some such
deals are initiated by building equity
owners, who shrewdly plan to buy in
their own outstanding obligations at
so to rs cents on the dollar, the Sug-
gestion is made by the 'moFtage BANK
ers that 'in all cases before selling
their real estate bonds at a sacrtflee
price investors should carefully in
VeStigate the status OF the property
upon which the bonds have been issued.
This can be done through the bank or
mortgage company that was originally
RESPONSIBLE for the issue, or through
other reputable financial institutions.
realtors or attorneys who are familiar
with the property. In most OF sucn
cases it will be found that the building
Is returning an income more than SUI
facient to meet interest and amortiza-
ton requirements. True, there may be
no active market for the bonds, but
this is often due to temporary condi-
tions in the whole investment feld,
during which bonds of all kinds are
low in price and not readily saleanle
It Is during times like this that shrewd
investors hold on to the bonds they
have or accumulate more.
Realty Situation.
Indications are pointing to an UNI
unistakable improvement in real estate
values, rental conditions and other fac
tors that should encourage, rather tnan
discourage, those who were fortunate
enough to acquire over the past 10
wears mortgages and mortgage bonds
bearing attractive rates Of interest"