Evening star., 1935-03-16
MORTGAGE LOANS
ATTRACT CAPITAL
Few of New Type, Long
Term Advances Being
Made for New Homes.

Capital Is starting to swing back to
mortgage investment and there are a
few of the new type long-term loans
for new home building being made,
but a Nationwide inquiry of the Ma
tional Association of Real Estate
Boards indicates that great conserv-
atiSm still exists in loan terms, par
ticularly in regard to appraisals for
loans.
The survey, made through the men,
ber boards, reveals that many COM
munitieS still have no mortgage
money, and the much discussed 20
year 80 per cent loans, insured or
otherwise, are at the present time
available in few communities. But
where money supply has started to
open terms indicates a pronounced
change from predepression home
mortgage practice. First signs are
appearing of coming competition be-
tween various types of long-term pay
ment plans advertising for the favor
Of prospective home owners.
Lending Policy Changed.
A notable change taking place in
the lending policy of life insurance
companies is feature OF the Sltua-
ton, the association points out. The
Prudential Insurance Co., for example,
through r. r. Rogers. second vice
president, informed the association
that it will entertain applications for
new loans or renewals on residential
property, on its 20O-month or quarterly
payment plan, and will also entertain
applications for new 240-month resi-
dental loans. subject to the following
minimum interest rates and percent
ages of loans to value: Under Al pei
cent of appraised value, Az per cent
Al per cent to so per cent. inclusive
Of appraised value, per cent; 81 pei
cent to SIS per cent, inclusive, of ap.
praised value, sig per cent; Sc pei
cent to 662s per cent, inclusive, Of
appraised value, per cent.
Walter S. Schmidt, Cincinnati, pres
ident of the association, observes: "A
visit to major financial centerS con-
VinceS me that within a very short
time real estate mortgage money viii
be made available in all the stable
communities. 1t will take some time
of course, for this flow to become
active"
Despite the fact that mortgage
money may be expected shortly IL
some quantity" he adds, Its steady
flow at lowered interest rates demand!
the establishment of a central mort.
gage bank, whether under Federal Oh
private auspices. Prevention of fu.
ture debacleS requires this"
Many Articles Misleading.
Meantime, many articles relative t.
new financing available are very mis-.
leading. J. c. Taylor. Kansas City
Mo, chairman Of the land developer!
and home builders division of tht
National Association of Real Estate
Boards, points out. Many individ
uals are laboring under the misappre.
hension that the Federal Government
is making 80 per cent home loans,
Mr.. Taylor finds. "Of course, tht
truth is that the Government undel
Title II makes no loans at all, bu
simply insureS loans If, as and wher
they meet certain conditions. In oul
community-and, so far as can f1ne
out, in most ommunities-there i.
very little if any money available fol
these so-called 80 per cent loans. The
truth of the matter is the F. H. A
under Title II has not yet done very
much TO assist in the financing of new
construction on longtime basis, and
it is unfortunate for the public to be-
lieve that this aid is available when
it is not"
Charles G. Mutually, Westchestel
County. NJ Y, writes, In this dis.
trict there is abundance of mortgage
money for the legitimate home seeker
from private sources on an uninsured
basis" Walter Gehrke. executive vice
president of the First Federal Building
e. Loan Association of Detroit, ar
approved mortgage under F. H. A.
hazards the opinion that loans will be
available under usual" mortgage
practice at less cost than insured loans
under present law and regulations and
that lin Detroit, at least, on loans
under the Federal housing act the
amount percentage of loan to value)
will be slightly more than the so pei
cent which we are now loaning under
our regular plan, but not anywhere
near the amount the public has beer
led to believe they can borrow" Reg
ular plan of this institution, 6 per cent
on 10-year amortization with initia
service fee Of to per cent, the lat.
ter on construction loans.
More Homes Being Built.
Morton G. Thalhimer, Richmond
Va, says, "The Government insurance
loans up to 80 per cent of the value
have not been operating in this sec.
ton, due to the fact that no local bank
in Richmond has as yet deemed it wise
or expedient to qualify" He adds
There are a few more homes beins
built at the present time and planned
for this Spring than any time in thu
last three or four years. These home!
are being financed by first mortgage
loans representing approximately 81
per cent Of their fair market value al
an interest rate varying from 51a PEI
cent to per cent and run for perioe
of five years, and are being amortizet
at the rate Of S per cent per annun
on principal, payable either annual,
or semi-annually."
In Dallas, $500 applications fo