Milford chronicle., 1933-06-09
GIVES MORTGAGE
INFOR NATION
[Confinned from First Pagsl

mortgage is otherwise kept in good
standing, that is If the interest pay
ments are made promptly. However,
in addition, the land banks are given
authority to permit borrowers to
postpone such interest payments as
they can show that they are unable
to meet. The second class, those
whose mortgages are held by banks,
trust companies, or individuals are
dealt with somewhat differently.
The Federal Land Banks are au-
thoried to issue a special type of
bond on which the rate of interest
shall not be more than 4 per cent,
With the money obtained from the
sale of these bonds the Federal land
banks may do two things: first, they
may make new loans on the same
terms as those granted to those who
| have already borrowed; second, they
may exchange the bonds for farm
mortgages. In case of exchange of
bonds for farm mortgages, the terms
of the exchange are based on the
value of the property covered by the
mortgage. If the appraised value
of the farm covered by a mortgage
which is offered to the land bank for
exchange is more than twice the
amount of the mortgage, bonds may
be issued in exchange for the bal
ance of the unpaid principal of the
mortgage.
In no case, however, may the
amount of the bonds given in ex-
change for mortgage exceed one
half of the fair normal value of the
land as appraised by the land bank
appraisers plus 20 per cent of the
value of permanent improvements
on the land. When mortgages pur-
chased by the land bank at re-
duced figure the farm borrower
will at once reap a benefit. He will
be given. the privilege of making a
new mortgage to the Federal Land
Bank for the amount the bank paid
for the claim and thus not only re-
duce his total obligation, but will
have the advantage of a low rate of
interest and the liberal payment
terms offered by the land bank. ..,
Refinaneing of mortgages by this
process of exchange of bonds for
mortgages requires not only the con-
sent but the active interest of the
person holding the mortgage. Appli-
cation for exchange of mortgage for
bonds must be made by the holder
of the mortgage to the land bank of
the district in which the mortgaged
farm is located. ....
{ There are other ways by which
farmers, whose mortgages are held
by others than land banks may pay
off the mortgages and obtain new
loans from the land banks. Where |
a mortgage has fallen due and is |
payable, or where the mortgage con- |
tains provision that it may be paid |
off at any time, the farmer may make |
application to the Federal Land Bank |
for new first mortgage loan with
which to pay off the existing mort
gage. If the holder of the mortgage |
is willing to accept the amount which
the land bank can lend on the prop
erty, the land bank has authority to
make a loan for that purpose, and
the farmer can thus obtain the bene-
fit of the low interest rate and the
favorable terms of amortization OF
the loan, in addition to benefit, If
any, of reduced principal.
The new Act provides other means
not only for paying off existing
but for the redemption
of land which hs already been sold
under foreclosure, also for obtain
ing funds with which to continue OPP
GRAFTON of the farm, and to satisfy
other than mortgage debts. The Act
provides a fund which is to be used
by the Farm Loan Commissioners in
making direct loans for these pur-
poses.
The Farm Loan Commissioner is
to make individual loans,
in amounts not to exceed $4,000 to I
any individual. These loans are for
I3 years and payment is to be made
Turing the last 10 years of the term.
Interest, however, is at 5 per cent.
Such loans must be secured by first
,r second mortgages against not only
he farm itself, but against any
stock, machinery or other farm prop !
,rty, which the farmer possesses.
The amount borrowed under this
plan, together with the amount OF
Ill outstanding claims which take
precedence, must not exceed rs per
,ent of the value of all farm prop !
'rty pledged.
Where farmers are not able to
meet claims against them, it may be )
possible in many cases that credi- {
ors. will be willing to pool their
laims and accept a compromise set
lement, funds for which may be
furnished by the Farm Loan Com
missioner.
All farmers in Delaware who wish /. .
o take advantage of the Act and ap-
Ily for loans, or reinance mort
ages, should note that their appli-
ations must be made to the Federal
and Bank at Baltimore, Maryland.
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