Evening star., 1936-08-29
MORTGAGE SYSTEM.
Of F. H. A. HAILED.
Plan Can Be of Great Aid
to Savings and Loan Units,
DR.. Refs Writes.
Special Dispatch to The Stai.


NEW YORK, August 29.-"Ap-
plied to q savings and loan associa-
ton, the Federal Housing Administra-
ton insured mortgage system Is just
about what the association makes 1t,
according to DR.. Herman L. Refs,
president Of the West Side Federal
Savings g. Loan Association Of New
York City, in the current issue OF the
Insured Mortgage Portfolio. DR.. Refs
says that the insured mortgage plan
has worked 50 well for the West Side
Federal Savings g. Loan Associa-
ton that it is being used in all their
upper percentage loans. The article
in part says:
with nearly 500 loans. totaling ap-
proximately $4,000, 900, insured by the
Federal Housing Administration, we,
In our institution have made the plan
mean the difference between going
somewhere and sitting disconsolately
at home.
Association officials who open their
minds, look for good in the Federal
Housing Administration program, and
seek to see just how it can be ad-
vantageously adapted to their own
operations may be pleasantly sur
prised-as were we. Those who sit
back and wait will see the parade
pass without them and, sadly enough.
may never realize that they might
have had a place up near the head
Of the procession.
Cites Own Experience.
"Our own institutions experience
with the Federal Housing Administra-
ton program is best told chronology
cally. Back in the 1930-1933 period,
in common with many other savings
and loan associations, we were find-
ing ourselves more and more In the
real estate business. Delinquent mort
gage payments and unpaid taxes were
becoming a nightmare. All mortgage
lending institutions were in similar
situations and the outlook was ex-
ceedingly gloomy.
Naturally, when the Federal Hous-
ing Administration plan was an
nounced, we, along with many others,
had our doubts about it. True, 1t was
based primarily on old savings and
loan principles, but it had some mod
ern improvements which some OF us
questioned. A streamlined car 10
years ago would have looked strange,
but we see nothing unusual about 1t
today. Similarly, some of us thought
the Federal Housing Administration
design little too radical for practical
usage at first, and we SHE'D of. But
after, a bit we began to see its good
points.
Having studied the new plan. we
desided to test it out with high-class
speculative builder whose reputation
we knew and who, in his rather ex-
tensive operations. had always found
secondary financing necessary to dis
pose of his houses. While We had
never put too many eggs in the spec
ulative building basket in the past,
we felt that If this builder found the
plan applicable to his operations. it
might enable us to broaden our activt-
ties considerably. We discussed the
plan with this builder and he agreed
to sound it out with his next pros
poets. He was neither warm nor cold
to the idea, just sufficiently interested
to give it q whirl,' as he expressed 1t.
All Five Want Plan.
I'VE heard nothing from this man
the next day, but he was waiting for
US when we opened our doors on the
following morning All smiles. he
greeted us with, Well, I tried 1t on
five prospects yesterday, and every
single one of them wants it. Just how
long has this been going on?'
THAT started it. We approached
other builders, as we had the first and
still others heard about the plan and
came to us. To date, we have made
loans insured by the Federal Housing
Administration in the developments of
18 builders, whose individual transac-
tions with us run from to 103. These
men accounted for most of the 457
insured loans, totalling $1,860, ,98l.31,
which We made up to June l."