White Bluffs spokesman. [volume] (White Bluffs, Wash.) 1907-1938, 1933-08-10
By Congressman Knute Hill


farms from foreclosure.
BY Congressman Knute Hill
Relief for those facing loss of their
farms through debt and those who
have lost them through foreclosure
since July l, 1881, is afforded in new
class of loans to be made by the Farm
Loan Commissioner. These are to be
in amounts up to $4,000 with interest
at per cent and repayment in 10
years, with no payments on principal
for three years. First and second mort
cages on farms and farm property may
be given as security, and the loan, plus
any prior liens, may be up to rs per
cent of the value of all the property
pledged.
The farmer can offer not only a
second mortgage on the farm real
estate, but also mortgages on any per-
sonal property, including livestock,
tools, and crops. The interest rate on
such loans is per cent. The act says
that these second mortgages must be
wholly repaid within a period no
greater than that for loans made UNI
der the Federal Farm Loan Act, or
maximum of 40 years, where a first
or second mortgage is secured wholly
upon the property and is made for
the purpose of reducing and ref1nanc-
ing an existing mortgage. All other
loans must be wholly repaid within
period Of not to exceed ten years
from the date the first payment on
the principal is due. The act permits
borrowers to pay only interest for the
first three years. At the end of the
three-year period the borrower would
start Systematically to pay off the
principal.
One OF the most important questions
to be considered Is this: When the
Commissioner takes second mort
gage on the property, what agree
ments does he have with the holder
of the first mortgage? The answer is
that it depends upon the aggregate
amount OF the first and second mort
cages. Where the aggregate amount of
the existing first mortgage plus the
| second offered to the Commissioner
| does not exceed $4,000, the first mort
during the period Of three years he will
not proceed against the mortgag0r or
the property for default In payment
of principal unless he gets the con-
sent of the Commissioner. Where the
aggregate exceeds $4,000, the mortgage
must agree not to foreclose for any
cause without consent of the Com
missioner for period of five years.
In many districts farmers wish to
get disadvantages loans from the
Federal Land bank. In some localities
| national farm-loan associations are not
| accepting loans. In these cases the
| farmers may make applications for
loans directly to the Federal Land
Bank but such borrowers will have to
| subscribe to stock in the Federal Land
Bank for the same amount that they
would have subscribed to stock in the
national farm-loan association if they
had made their application to it. This
amount is per cent of their loan.
| Under this arrangement, borrowers
would have to pay a higher rate OF
interest at least temporarily. The in
terest rate will be one-half of one per
cent higher than that charged where
loans are made through associations,
but farmers who borrow directly from
the bank may agree that when ten or
more borrowers have obtained direct
less than 100000 residing in a locality
which may be conveniently served by
an association they will unite to form
an association. After such an associ-
alton is formed the stock held by Its
members whose loans are in good
standing will be Cancelled at par and
the borrower will receive an equal
amount OF stock in the association
When, and if such borrowers become
members of associations, the interest
rate on their loans, if in good standing
will be reduced one-half of one pei
cent.
Farmers who make application d.
rectly to the bank will pay the same
initial fee to it that they would pay
if their application came through 6
national farm-loan association. There
will be no difference in the size o.
the loan made by the banks and thai
made by the associations. Each is lin.
tied to SO per cent of the appraised
normal value of the land for agricul
tural purposes plus 20 per cent Of tn
insured improvements.
Borrowers from the Federal Lane
Banks will not have to make appli
cation to the banks for reduction II
I, the interest rate. Interest maturtn,
during the five years commencing Jul
' II, this year, in connection with loan
made through national farm-loan as
sociations between May IL, 1888 an
2 May IL, 1885, will be charged at tn