The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1933-09-21
Thursday, September 81, 1888
Otto Bremen,
Loan Head,
Explains Lau'
Accepted Place At Sacrifice
to Perform Badly Needed
Public Service

The following is an explanation
by Otto Bremen, head of the Home
Owners Loan Corporation of Min
nesota, which opened on Tuesday,
September 5.
To begin with I wish to say that
I accepted this office very reluct-
antly because of my private bust
ness, but when was assured that
there was an opportunity to help
the thousands of families who
otherwise might lose their homes
in Minnesota, 1 accepted the re-
sponsibility. Frankly, the task is
a tremendous one and we can ac-
complish the purpose of the act
only if everyone in Minnesota will
cooperate with us, will appreciate
the difficulties we must face and
lend us their wholehearted support
That all of you may know clear
ly the purposes under which the
Home Owners Loan Act of 1888
was set up I want to remind you
that the action was in accordance
with the wishes of our President,
Franklin D. Roosevelt.
One thing must be constantly
kept in mind when considering
mortgage loans and bond ex-
changes and that is that under the
rules and regulations laid down by
the Home Owners Corporation we
are here for the sole purpose or
affording relief to distressed home
owners. From the flood of mail
that I have already received 1t is
apparent that not every one who is
applying can qualify under the act.
You, ladies and gentlemen, as you
return to your several communl-
ties, can help us if you will re-
member that to be eligible tor q
loan through the Home Owners
Loan Corporation an applicant
must occupy the property or claim
it as a homestead. The loan to be
negotiated must be on property
the appraised value of which shall
not exceed $4,000 and it must be
a dwelling for not more than four
families. An applicant may negotl-
ate a loan to redeem property lost
through foreclosures within two
wears Of the date of their loan re-
quest.
And I repeat for emphasis-loans
are for relief purposes only to dis
tressed home owners.
You have my assurance that In
receiving and reviewing applica-
tions, courteous careful considera-
ton will be given every applicant.
If our Executive Committee ap-
proyes the loan and it is conSum-
mated. repayment of the loan Will
be required in equal monthly pay
ments upon a fixed amortization
schedule which will include the In
terest and principal. This schedule
has definitely been set up by the
Directors Of the Corporation at
Washington.
I have another point upon which
I want to lay particular emphasis.
There are two things the Home
Owners Loan Corporation must
necessarily consider in the negotla-
ton of it's loans. One is that the
appraised valuation to be estao-
lished will be fair, honest and
equitable; the other is that the
bond issued upon the negotiation
of the loan shall be so amply Sc
cured that the value of that oono
will never be jeopardized. want
to assure YOU that we know exact
Nv what we are doing IN connec.
ton with the consummauon u
these loans. 8.
Won will be more interested In
tho rules and regulations laid down
nv the board of directors for the
proper appraisal of property IMAM
in ANYTHING I might tell you per
sonally and for that reason 1 am
going to ask you to bear Win ihe
inst a moment while READ you Iie
instructions to appraisers.
.sThe object of appraisals 1or the
Home Owners Loan Corporation
is tn arrive at the fair worth Oh
the property appraised to the NOME
owner applicant or home owner
tn whom the property might De
suited as a home. This 1alr woi.n
is not necessarily the tecnnlcaA
market value. Appraisers are In
str1cted to give equal weight 10
~ the market value at the time
of appraisal; ca the cost OF a
similar loan at the time of the ap,
nraisal. plus the reproduction COST
- the building, less depreciation;
and 90 the value of the premises
GO arrived at by capitalizing the
1nonthly reasonable rental value Q,
the premises over a period OF TN. 5ns
past ten years. To iliustrate :
instruction, let US suppose '
typical American home was soulu
w worth in 1928, $4,000 and there.
fore at that time, when there was
a fairly normal market for i homes mes
S.d a market value of $4,000
Assume that this home today ma:
market value of $500. -, Tn .
present cost of such a lot, plus