The Waterbury Democrat., 1936-10-16
By ERNEST M. FISHER Written for United PreSS)

Washington, Oct. 16-(UP)-No- where in the European mortgage market is found the precise device of mortgage insurance in the form provided by the Federal Housing Administration.
 In England insurance companies make practice of writing form of rolicy which protects the lender against loss of an advance in eX- cess of the normal proportion of value. Thus where it is the custom to lend up to 75 per cent of the value of residential property, an excsss advance of Is per cent may be obtained from this same source in connection with policy written to cover the risk involved in the excess advance.
 The premium charge for this policy is usually 10 per cent, pay able at the time the mortgage is written. This amount is added to the face value of the loan and re- paid over its term in regular in stallments.
 Deposit Is 1mpOunued
 Another device, current in Eng land, is used by speculative build CTS to bridge the gap between the 10 CT 15 per cent down payment by the buyer, and the 75 per cent advance normally procurable from the building societies. The builder makes deposit with the building society to cover this excess advance to the borrower, and this deposit is .impounded until the loan is re- duced to normal proportion of the value of the property. The building society pays interest on the deposit at the current rate.
 The guarantee of advances by public authority has been widely practiced for many years in Eng land and on the continent. In England local authorities may guar antee the advances made to local public utility societies. They like wise may guarantee loans made by building societies to the members for the purchase of houses.
 Individual Loans Secured
 Tn the continental countries, the guarantee by local governments of individual loans to housing So- cieties has been an essential factor in their widespread activities. Guar anteeS may be made in connection with either first or second mort gages.
 The problems encountered by the local governments in this form of Kuarantee are similar to those of the Federal Housing Administra- ton in its large scale housing divi- sion The method of analysis and the insistence upon minimum stand ards form 8 direct parallel with the pperations of the Federal Housing Administration.
 Tn one large municipality, the real estate department refuses to uublish its standards, finding it more effective to deal with each case on its own merits and to negotiate Tor improvement of standards whenever feasible.
 Sometimes it is carelessly as- sumed that various methods and devices which have been successful in Europe may be applied directly to housing problems in America It can easily be demonstrated however, that the success of given device does not necessarily demon SLrate its usefulness in this country Scandinavian Situation Described
 Tn Scandinavian countries much of the housing legislation has re- lated to the activities of limited dividend corporations and coopera- tive housing societies which play a leading role. The importance o1 these housing societies is, in part c reflection of the social character istics Of the people and in part g matter of chance development The different situation in America is Illustrated by the fact that only in recent years have limited divi- dend housing corporations and cooperative housing societies be- come of any importance.
 In most countries there is a much wider acceptance of government in an forms of economic activity than IA America. An extreme example is found in Vienna where the govern 1nent followed policy of providing housing for the working classes at nominal rent.
 1n England. ia connection with 1|ufn clearance operations. unfit houses may he acquired by the local adthorsty upon payment of only tbs site value Of the property with no 11zapeusation for the improvements EnIs procedure freauently results in