Evening star., 1935-02-23
MORE ATTRACTIVE
HOME LOAN PLAN
Building Association Lead
ers Look for More FIex-
ibiIity of Operations.

Making it easier and more attrac-
tive for people to build homes by
affording them some choice in the
terms of loan repayment IS the object
of two steps taken by building and
loan association leaders meeting here
this week
Concerned chiefly about reviving a
normal use of home mortgage credit,
the American Savings, Building and
Loan Institute, holding its annual
Midwinter conference yesterday, and
the United States Building and Loan
League Committee on Titles II and III
of the national housing act, meeting
the day before, threw their energies
toward plans by which the aSSocia-
tions in their 10000 localities can
make their lending operations more
flexible There is no intention Of
departing from the time-honored
building and loan practice of monthly
repaymentS on the loan, but details
of the borrowers contract can be
varied to encourage more borrowing
at this time, it is said.
Study to be Published.
The institute authorized the publi-
cation of a study devoted to lending
plans. the research bulletin to be for
warded to executives of more than
1000 associations 1t will contain
careful valuations of various lending
plans and Improvements which have
been tried out by individual aSSocia-
ton managers in many parts of the
country. including direct reduction
loans as contraSted to the more gen.
eral share accumulation loan, variable
interest rates depending upon the
risk, life insurance to protect the de-
pendentS of the mortgagOr, and longer
periods for amortization.
w. R. Gibbon of Los Angeles. re-
tiring president of the institute, which
is the educational organization of the
$7,0O0,00O000 building and loan buSi-
ness, indicated that the loan plan
study would be one of the most far
reaching surveys ever undertaken by
the institute and would undoubtedly
be effective in promoting more credit
expansion this year.
The 16 members of the leagues
committee on Titles II and III of the
national housing act decided to sub
NIT recommendations to the building
and loan associations in regard to
their use of and cooperation with the
mutual mortgage insurance plan.
Again the emphasis is upon giving the
association more than one type of
merchandise to offer prospective bor-
rowers. John G. Hall, st. Louis, chair
man of the committee. emphasizes
the intention of these institutions to
offer insured mortgages as an addi-
tional feature to their present loan
plans developed by 100 years expert
ence, and by no means as sub
stitute
Optional Contract Offered.
"Just as many of the associations
have been Offering since last Septem-
Der an optional contract for moderni-
zation loans, either the F. H. A. in
sured modernization credit plan or
the older building and loan plan, so
the present considerations may lead
to a similar use by the associations of
optional plans for their ordinary mort
gage loans on homes" said Mr. Hall.
The depression has taught the en-
borrowing and lending that nobody
would even suggest that the building
and loan associations add to their
lending plans the short-term mort
gage without provision for amortiza-
ton. We have never considered this
type of loan in keeping with building
and loans aim of helping the bor-
rover to home free and clear and
nowadays the best minds in other
financial circles. as we'll as our own,
admit the futility of such attempts
to finance necessarily long-term obli-
cations on a short-term basis. There
are, however, many variations of our
own experienced plan which have
developed in recent years, and if We
can incorporate the best features of
these into our own offerings to the
public we will undoubtedly appeal to
new groups of families which will
undertake home ownership on one
basis but not on another The Ameri-
can is still an individualist and you
cannot Standardize his type of home
owner credit beyond a certain point"