Evening star., 1936-05-23
BUILDING SHOWS
Definite GAINS
New Yorker Sees Special
Benefit to Durable Goods
Industry.

The building industry Is showing
. definite upturn everywhere, accord
ing to j. Howard Ardrey, formerly
vice-president and director of the
National Bank of Commerce and the
Guaranty Trust Co. of New York. In
addition to other benefits which this
has brought, Is the fact that the
dureble goods industries fave been
immensely stimulated and hundreds
Of millions of dollars of private capital
have been put into circulation.
Mr.. Ardrey, now assistant to the
Federal Housing Administrator. has
Just returned from trip to the
Pacific Coast. 1t included visits to
every important financial center IN
that and other sections. He conferred
with officials of financial institutions
and leaders in the real estate and
mortgage fields and says that every
where the new mortgage system,
which provides for self-amortizing
mortgages over long periods up to
20 years. is being generally adopted
by mortgage institutions whether they
are doing business under the Federal
Housing Administration plan or in
dependently
The significance Of this, says Mr..
Audrey. lies in the fact that long
term mortgages are rapidly displacing
the old short term paper and at the
same time wiping out the expensive
and burdensome system of secondary
financing, thus making it almost i'm
possible for the country ever again
to have to face such a situation as
developed in 1929 and 1880 when the
collapsed and thousands Of home
owners lost everything they had.
The insured mortgage system pro-
vided for under the national housing
act is being generally adopted by
home owners, building constructors
mortgage and real estate men and
financial institutions throughout the
country, MIR. Ardrey found, and its
operatian has stimulated the con-
struction industry and provided en-
ployment for thousands of men and
women.
Wherever one goes around the
country these days" said Mr.. Ardrey,
"he finds an immensely improved
frame of mind and this is based
largely on the steady advances being
made in the construction industry.
Real estate, long a drug on the
market, is again assuming its true
value, and believe that the present
Spring season will see residential
building upswing that will be country
wide. This renewed faith in real
estate has been built largely on the
new mortgage system which permits
q home owner to pay OF his mortgage
out of his current income. The old
system of paying~interests and renew
ing over and over again seems to have
departed for good.
The advantage which the banks
have found in the new system lies in
number of things, The impartial
appraisal of properties made by the
Federal Housing Administration helps
to a more accurate determination of
the real value of a banks existing
mortgage assets. The refunding Of
present mortgages takes them from
under the moratoria laws, Making
them current obligations subject to
ready sale as insured mortgages.
While held in the portfolios of banks,
insured mortgages, upon default and
foreclosure may be converted into
oebentures bearing three per cent
interest and guaranteed as to princi-
pal and interest by the United States
Government.
In addition, insured mortgages
have liquidity not inherent in other
mortgages and an open market exists
Tor them through investment bank
ing houses and other approved mort
cages, which includes commercial and
savings banks, life and fire insurance
Companies, building and loan associa-
lions, foundations, trusts, and individ-
uals through living trusts adminis-
tered by banks and trust companies.
Mortgages can also sell to the Re-
construction Finance Corporation
Mortgage Co. insured mortgages on
new construction begun on or after
April l, 1885, and in addition, in
sured mortgages are eligible as
security for public deposits in many
States, are accepted as preferred
collateral in seasonal borrowings from
bank correspondents and are eligible
as collateral at Federal Reserve banks.
Home owners and those desirous
Of building homes for themselves have
everywhere learned that an insured
mortgage is evidence that their in
vestment Is economically sound and
that in new construction they are
assured Of the use of the best and
most lasting building materials,
sound construction and favorable
neighborhood environments. The
campaign of education which the
Federal Housing Administration has
carried on has taught them these
things and is a definite factor in the
acceptance of this new order"