davidaulloa/AmericanStories huggingface dataset:
The Washington times., 1937-01-18
Cost NOU 6 Per Cent

Mortgage money Is being offered
now in the United States at from
3 to per cent, but when you
add the renewal or service and
insurance charges, and perhaps a
bonus for a construction loan
carrying over until the FILA in
sured-mortgage plan can become
operative, the actual charge to the
home owner is likely to be nearer
6 per cent than any lower figure,
and may be higher.
In poking into dark closets for
hidden facts you quickly discover
that although the home owner is
getting more of break than he
did before the Government took a
hand in his problem, all is not yet
sweetness and light when it comes
to buying a home and keeping it
after you buy it. You discover,
too, that until 1886 mortgages were
being forecloSed at close to their
all-time peak in 1898, and that if
you don't watch your step you can
still buy a house with an extra
mortgage hidden in the attic or
the walls.
And the happiness boys are not
telling the whole truth when they
talk about 5 per cent FILA insured
mortgages, nor will you find that
all the LankS and other institutions
they list as making FHA-insured
loans are really making them.
You also learn that up to the
present time you often can't get
a construction loan without pay
ing a bonus covering the period Of
constructions 212 per cent bonus
is permitted by the FHA-in ad-
dition to the regular interest and
appraisal and title fees.
These facts are carefully kept
out of sight while the publicity
organizations which always sit
next to the administrative throne
keep the spotlight focused on the
happy young couple standing in
the doorway Of the uncovered
cottage, saying ecstatically:
And TO think 1t only costs US
The Washington times., 1937-01-18
Agencies Listed

Meanwhile the function of sup
plying or encouraging the flow of
money into non-farm home mort.
cages on a permanent basis is
principally performed at present
by agencies created for that pur.
pose. AS the situation stands,
these are:
l. The Federal Home Loan Bank
System, fair-haired child of the
United States Building and Loan
League. With it's affiliates, the
system has a quarter of a billion
dollars in working capital. Under
it are grouped the IL regional
Home Loan Banks, which lend
money on mortgage security to
private lending institutions at
from 3 to 4 per cent-necesSitat-
ing S or 6 per cent charge to
the borrower, since there has to
be about a per cent spread to
cover operating costs; the Federal
Savings and Loan associations,
which are merely Federalized
building and loan organizations
doing business for the most part
in territory formerly served in
adequately by existing associa-
tionS; and the Federal Savings
and Loan Insurance Corporation,
which on application by the
building and loan associations
inSureS accounts of individual
depositorS in FederaliZed aSSo-
Citations up to a $1,000 limit,
charging premium of one-eighth
of one per cent for this insurance.
These agencies are all self-financ-
ing,
The Washington times., 1937-01-18

real estate wouldn't be such poor
security after all, and would be
about as liquid" as anything
else!
1t will come as a shock to most
persons that the foreclosure rate
on nonfarm mortgages in 1886 was
only ~ per cent below the 1888
panic peak. And it was not until
last year that foreclosures showed
any substantial decline.
FLHB and FHA SpokeSmen have
made a point of it in many
speeches and official publications,
including their own handbooks,
that foreclosures in 1888 were
running at the rate of 1000 a day
when the Government threw its
resources into the breach to meet
the emergency. That would have
been four times the foreclosure
volume of 1925.
That was an exaggeration. The
1888 rate was about $40 a day, as
compared with something over 600
a day last year.
SOME FIGURES
Hole StatiSticians estimate the
of urban home foreclosures
by calendar years as follows:
1932-248,7O0
1933-252, 400
.. 1934-230,776
1935-229, ,428
1936-185, 900
Last year, for instance, the
The Washington times., 1937-01-18
Operates Separately

2. The Federal Housing Admin
iStration, which came into exist
ence under the aegiS of the Ma
tional Association of Real Estate
Boards. 1t operates independently
of the Federal Home Loan Bank
System-and with more than a
bit of jealousy both ways. 1t makes
no loans, but inSureS long-tern.
single. amortiZed mortgages on new
or old homes and new large-scale,
low cost housing projects. With an
authorized inSurable limit of two
billion dollars. which from the
present trend will be exhausted in
18 months, it operates on a mutual
basis and depends on a reinSur
ance reserve built up by half-per
cent insurance charge and a some
The Washington times., 1937-01-18
Scattered Finance

But there is still more to the
story of scattered finance" Dig
around and you'll find that the
Reconstruction Finance Corpora
ton, through the RFC Mortgage
Company, has not only refinanced
existing mortgages, but financed
construction of urban income-pro-
ducing property, such as apart
ment houses, besides buying FdA-
insured mortgages.
Even the Federal Reserve banks
are now advancing money on
mortgages. An amendment to the
national banking act in 1885 gave
national banks the privilege Of
increasing the percentage of their
capital and surplus or Of savings
and time deposits which might be
put into insured loans. Another
amendment gave the Federal Re
serve banks authority to make ad-
vances to member banks in the
Federal Reserve System against in
Sured mortgages. Again duplica-
ton of function!
If there is any genius who is
able to work out a plan for
bringing all Of these activities into
single fold, making them all a
part of a single home-mortgage
reserve and insurance system or a
home-mortgage division of the Fed.
eral Reserve System, he has yet
to disclose his identity. One OF
the biggest and brainieSt figures
in home-mortgage finance in the
United States smiled as he spoke
of this,
He picked up a pencil and drew
a simple diagram. 1t showed the
Federal Reserve Board at the top,
and under it three major divisions.
In one bracket were the Federal
Reserve banks servicing the com
mercial banks. IE another was the
Federal Home Loan Bank system
Servicing the savings banks, life
insurance companies and savings
and loan associations through the
Federal Home Loan banks and
affiliateS, for the benefit of the
urban home owner and investor in
city mortgages. In the third was
the Farm Credit Administration,
The Washington times., 1937-01-18
important Problem

OF these three, the establish
ment of a sound system of home,
mortgage finance is at once the
most difficult and the most i'm
portant. Next to the debts of ma
tional, State and local govern
ments the open home mortgages
of the country. reaching a peak OF
twenty-one million dollars in 1928
and again headed for that figure
now, represent the largest single
block of mortgage Indebtedness in
the United States.
In the minds of men who have
given much of their lives to a
study of the subject, the erection
of an adequate home-mortgage re-
serve system is fully as important
as the establishment of a reserve
system for commercial banks. Eu-
rope discovered this, and benefited
by the discovery.
The United States has Jagged
far behind most European nations
in arriving at this point, as it has
in accepting governmental obliga'
ton to provide large-Scale housing
at low cost for the masses of in
dustrial workers. But having come
to it finally, the machinery is be-
ing set up to loosen, control and
stabilize home-mortgage credit
through governmental action. In
the process governmental assist
ance will be given wherever re-
Quired.
Along with ample credit, it is
the hope of the sponsors and ad-
ministrators of the several gov
ernmental programs concerned
with with the problem of finance
to make it possible for the middle
class American-who for present
purposes may be regarded as the
man who owns or would like to
own a five or ten thousand dollar
home-to borrow a larger proper
tion of the cost at lower interest
rates than has been possible in the
past. There are men in Washing
ton who are thinking even now in
terms of England's success in work
ing out a system by which home
owners may borrow as high as 80
per cent of the money needed to
buy or build. at from 4 to Az per
cent interest. 1t is something to
shoot at.
The Washington times., 1937-01-18
Progress Noted

But there is still progress to be
made in the direction of lower
interest rates, in eliminating un.
reasonable hidden profit, in dis
couraging speculative building by
racketeering suburban develop
erS," and in consolidating or coor-
dinating the activities of existing
agencies which at times show more
interest in pushing their own pet
programs than in getting together
on a permanent, closely coordi'
mated, broad-gauge program of fl
nancing and inSuring home loans
for home owners on the most favor
able terms possible.
Although the Federal Home Loan
Bank System is the biggest mort
gagereServe lending institution in
the world, when all of its Subsid-
iarieS are included, the Home own
erS' Loan Corporation, with three
billions of loans outstanding, is at
present only glorified collecting
agency. Its loaning life ended on
June IL, 1886. From now on, un-
less it's functions should be en-.
larged by Congress, it will devote
itself to cleaning up the mess
bequeathed it by panic condi-
tionS in 1888, when it success
fully damned the foreclosure
flood by taking over a million
mortgages-many of which the
building and loan associations and
other institutions were glad to get
rid of-and putting it's own house
in order. On a rising market it
will come out all right.
The Washington times., 1937-01-18

what smaller service charge, both
of which are paid by the borrower,
to cover it's costs and its losses.
These charges, added to the )
per cent maximum permitted on
FILA insured loans, bring the
amount the borrower actually pays
on a So-called per cent loan to
6.24 per cent.
Under this plan the FHA put
$700, 100000 of new business on its
books in 1886.
What the Hole did for the city
home owner the Farm Credit Ad-
ministration, through the Federal
Land Banks, did for the Iarmer.
It has refinanced the mortgages
of distressed farmers and loaned
a smaller volume of Federal funds
for the construction or recondi-
tioning of farm homes. With other
Federal credit agencies, it will
probably be brougt ultimately I'm
der the jurisdiction of the Treas
ury Department,
The Washington times., 1937-01-18

That means that Hole fore
closures in 1886 were launched at
the rate of more than 5000 a
month. On the basis Of 300 work
ing days in the year, they averaged
better than 200 a day. And
Hole only carries 18 per cent of
the total urban mortgage load Of
the country. Multiply that five
and a half times, assuming the
same proportion to hold good, and
the astonishing figure Of 345, 600,
or 1,150 a day stands forth as a
1885 average.
Unquestionably this Is too high.
The Hole loans were distress
loans. To get help from the
Hole the borrower had to prove
that his mortgage had gone sour
or that he was bad risk or that
he couldn't get the money any
where else. Private lending insti-
tutions, on the other hand, kept
their good mortgages wherever it
was possible to do so, and since
1888 have loaned only on gilt
edged security to borrowers who
gave every indication of an ability
to meet their obligations.
But though there is no reason
to believe that the foreclosure rate
in 1886 was so high as in 1888, it
is obvious that Americans are still
losing their homes by foreclosure
much faster than they were be
fore the 1929 debacle and the dark
days which followed.
The Washington times., 1937-01-18
HIGH INTEREST RATE
CHECKS BORROWING

Note-A ,thin maze! Here is the story Of the
financial device by Which the Federal Government seeks
to assist the citu suburban home and protect the
investOr sound first mortgages sound urban property
hoe-mogHge system at last to be on the
aUay But interest rates still too high too much money
is going into speculative bdig too much is being lost
That's the 1cay Washington looks at it, and that's the
dton President Roosevelt and his financial experts are try
ing to remedy In this article seventh of the current ser1eS
e read also that foreclosures 1884 and 1885 not
far beloc their ae hgh and did not decline Substam
TALLY until last gear.
The Washington times., 1937-01-18
FLA Record Good

BY contrast with the foreclosure
record of the Hole, the FILA,
created under authority of the ma
tional housing act on June 81,
1884, had up to January /, 1887,
insured half a billion dollars in
modernization and repair notes
and $1,160, 100000 in long term
mortgages, while at the same
time taking over not more than
a dozen properties by foreclosure.
The explanation Is plain: A ris-
The Washington times., 1937-01-18

S22 q month! Isn't the Govern
ment grand!"
What it all boils down to is that
the investor in home mortgage is
safer today than he has ever been,
considering that every mortgage
guarantee concern in the United
States has collapsed-thiS state
ment on the authority OF Chair
man John H. Fahey of the Federal
Home Loan Bank Board-and that
although interest charges could be
lower, it is really easier than it
has been for years to borrow money
for a home.
Through the activities Of the
Federal Home Loan Bank System
and the Federal Housing Admins
tration the single long-term mort
gage has been standardized as the
basis of private home financing,
and you can borrow up to 80 per
cent of the cost. That's the big
gain made by the home owner
under the new order.
FHA also keeps weather eye
on the construction which goes
into houses when it insures the
mortgage. 1t does its best to see
that the buyer is not cheated. And
that's a break.
1t has just about wiped out the
uSurious second mortgage and the
bonus for second mortgage money.
And that helps.
The Washington times., 1937-01-18
By T. A. HUNTLEY

All activities of the Federal
Government which in any
way relate to housing or
home financing fall generally
into one of three classified
tionS:
/. Long-range programs de-
signed to provide low-cost houS-
ing of the better sort for per
sons of low income.
2. Temporary programs hav-
ing as their objective some other
form of relief or assistance.
8. Those which have in view
the creation of a national home
mortgage reserve system as a
permanent reinforcement Of
the nations financial structure,
or the stimulation through Fed
eral insurance and other devices
of the flow of private capital
into mortgage investments.
The Washington times., 1937-01-18
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The Washington times., 1937-01-18
HOME MORTGAGE SYSTEM GREATEST HOU

Hole, which up to January /,
1885, had foreclosed only 4,470 of
its million outstanding mortgages,
clamped down on delinquents for
the first time. From the first of
the year on, foreclosure proceed
ingS we're instituted month by
month as follows:
The Washington times., 1937-01-18
KeIp5 p5;aIm1IaiItzM4 5;I1Ii

Q @aAgSaetur@'s Rots:-lNferior produets soRS q.
kslp and mat prOparaonS-ih mitatjOn 81 te SSauISS
kslpa@alt-aFS being offered a. SubstitGtss Deaf 6S
fooled. Demand senuins Seeded KeIpamaIt TShisia
AIaTs teetAs Results guaranteed u 1SNeT SAek.
The Washington times., 1937-01-18

Servicing the farmer through the
Federal Land and intermediate
Credit banks.
The Detroit tribune. (Detroit, Mich.) 1935-1966, 1937-10-02
SOCIAL NOTES

A birthday party was given ias'
Saturday night In honor OF Mrs.
Lula Giles, at her home. 1922 Madi-
son. A delectable menu was serv-
ed and all present had a pleasant
time. Guests included Mr.. and
Mrs. Hunter. OF Ann Arbor; Mrs.
Cook and two Williams Brothers,
OF IHamtamck: Mr.. and Mrs. Brown,
Mr.. and Mrs. Genning, Mrs. Grit
fin. Mrs. Price. Mr.. Young. Mr.
nadc, Mr.. Baker. Mr.. McGill, Mr..
Collins. and MIR. Giles The honor
ee received many lovely gifts.
Mrs. Lillian Harris. 1858 Has
lings street honored her husband
Franklin Harris with surprise
birthday party Sunday, September
26 at 5 p. m.
Guests who enjoyed the delicious
dinner and shared in the gayety OF
the occasion we're Mr.. and Mrs.
Boyd, Mr.. and Mrs. Goudlock,
Mrs. NJ. c. Gee and Alonzo Gipson.
II. F. Frazier OF Stratford. Conn,
left Tuesday morning after spend
ing a pleasant visit with his aunt,
Mrs. c. f. Rousey. 576l Hastings
street. Mr.. Frazier was here on a
business trip and while in the city
his aunt honored him with par
~ Saturday night, September 25.
The Detroit tribune. (Detroit, Mich.) 1935-1966, 1937-10-02

interest in Lansing. How about II
Betty Brown. Harriet Merchant,
Josephine Scott and others?
Donna Merchant and c. Brown
enrolled at Kalamazoo State
Teachers College. Both are sopho-
mores this year. Loads of success
to both OF you.
Booker #. Washington club
seems 10 be burning tire-water late
~ according 10 late reports.
James Williams penthouse is
aow being repaired
Is Ruth Booth OF North Detroit
always so quiet. Still water runs
deep.
Playboy Bill has now resigned
his title after JOLT from ccu-
ne OF east side Detroit girls and
IS looking for successor.
The gentleman from the first
Confessional district is still va
cationing but he is needed to set
tie arguments.
Counselor Jack Young is now as
Stunning the responsibility OF edu-
eating The State Employees on the
Civil Rights Act
The lovely Ella Rec Austin is a
very clever lady. She holds the in
terest OF several gentlemen
The Detroit tribune. (Detroit, Mich.) 1935-1966, 1937-10-02
NORTHDETRO|7
By Mrs. Josephine Boyden

Due TO the election and the limit
I'd space available for social aews
in this issue our notes will be
brief
7 s.rsices az Lomax Temple
g. VI + Zion Church last sunday
We're excellent Pastor d. p Tho
nl- preached II the morning sub
Iect The Conflict OF Life In the
ryening. The Missionary Society
presented an interesting program.
Hith Ms Thomas as mistress Of
ceremonies Mrs Mabel (arlyle. Of
Port Huron was recent visitor
in Norh De:oit She will represent
be Tribune in her city
Mrs Hattie Ford OF Louisville.
~ j. haviie pleasant visit here
ai'A her daughter, Mrs. Eva Rob
inson
Alr cynthia Johnson. Of 1881
Godla,d street is again i'll al her
The Detroit tribune. (Detroit, Mich.) 1935-1966, 1937-10-02

DR.. and Mrs. Richard Laurie, OF
Washington. ID. c.. were guests OF
relatives in Detroit last week. Mrs.
Laurie was formerly Miss Mary
Underwood. a popular member OF
the local younger set.
Mrs. Lillian p. Chensue, 6l15
Mortified avenue. has just re-
turned from vacation trip to New
York, Niagara Falls. and Canada.
She left Detroit last Friday for
Wisconsin. 10 enter Gloria Brax-
ton and George Chensue in ST.
Benedict Moore Institute. Geneva
Mccaled daughter OF Mrs. Chen
ste: and Roy Braxton were also
members of the party. They spent
a few days In Chicago. seeing the
sights there.
Mr.. and Mrs. Nathaniel Garritte,
80 Forest avenue. entertained at
dinner last Sunday in honor OF
Misses Marie Murdoch and Bessie
Reed. both of New York City.
Places were arranged at table
centered with garden flowers.
Guests were: Mr. and Mrs. John
West. Constance West, Miss Gen.
eva Goodman. ]. w. Hinton. Az
ter the dinner the party were
guests Of Mr.. Hinton, at the Melody
Club.
The Detroit tribune. (Detroit, Mich.) 1935-1966, 1937-10-02
Bradley Channel
To Bring Detroit
M ore Business

The scath and west sides of De-
troit are entering new era Of
progress and development follow
ing Congressional approval OF
Bradley Channel. the Detroit River
Industrial waterway that will bring
deep water shipping facilities 10
the huge manufacturing empire
along the waterfront.
President Roosevelt has just
signed the mi authorizing an ex-
penditure Of sl,575.ooO for the pro-
jet, which has been named Brad
Icy Camel in honor OF Council
man william =. Bradley. candi-
date for reelection who first Wis
ualized the potentialities for steel
mills and allied industrial develop
ment with such a waterway. and
whose years OF efforts brought the
waterway into existence.
Here at Detroits Lake Erie
gateway is the voice OF a billion
and half dollars of invested cap
ital. articulate in smoking stacks
and flaming furnaces. broadcasting
to the nation that its hour has
struck. Western and southwest
ern communities are humming with
activity as corporations, big and
small, push forward with plans TO
share In the benefits to come with
the waterway improvement.
In this section lies the greatest
prospective territory for Michigan
Industrial development, for the es-
tablishment OF heavy industry and
huge plants. for the great steel
center TO come.
Completion OF Bradley Channel
will give this area the adequate
deep water freighting facilities II
has so long needed to make 1t one
OF the country's outstanding in
dustrial centers.
New steel industries. with a
ready market In Detroit's great
automotive and accessory plants,
and expansion OF the present big
industries there, will mean en-
ployment for tens of thousands
more workers living in the south
and west sides of Detroit" Coun-
Gilman Bradley pointed out.
This will mean a great home
development. 1t means that the
Delray and other business COM
munities along the waterfront will
become thriving business centers.
II means an increase OF hundreds
Of millions of dollars In south and
west side property valuations"
The Detroit tribune. (Detroit, Mich.) 1935-1966, 1937-10-02
GAY PARTIES
HELD In HONOR
OF VISITORS

Mrs Nora Fletcher and Mrs. Mae
Wilson. two prominent visitors
from Hot Springs. Ark were recent
house guests OF Mr. and Mrs
James Stone. e52l St Antoine.
Mrs. Fletcher is an outstanding
cateress and civic leader in her
city while Mrs. Wilson is director
Of the choir OF Visitors Chapel, in
Hot Springs. and Is widely known
for her concert work
While the visitors sojourned in
this city. Detroiters made their
stay pleasant one Among those
who entertained the two ladies'
were Mr.. and Mrs OTIS Butler.
who were hosts at dinner and tour
OF Greenfield Village and the Ford
Rotunda Mr. and Mrs Mapp. hosts
at a luncheon: Mrs villa Cunning
ham. dinner hostess Mr.. and Mrs.
Davidson. OF Palmer avenue, din
ner and theatre party hosts. Mr.
and Mrs William Anderson gave
the visitors a tour OF the city A
luncheon was given by Miss Argic
White breakfast by Mr. and Mrs
Bob Robinson. OF + Forest. Mr.
and Mrs. Colder smith Of 2ith
street. dinner and visit 70 Naci-
ma club and Canada a reception
was given by the Choral Club Of
s. stephen Church and Rev and
Mrs J II Howell We're hosts AT q
breakfast Mr. and Mrs Clifton
Russian motored the visitors 10 the
station and presented them with
candy.