Evening star., 1937-04-03
U.S.F0RECL0SURE s.
GAIN ANTICIPATED
Mortgage Bankers Survey
Says Load Likely to Ex-
Ceed Expectations.
Special Dispatch to The Star.

Special Dispatch TO The Star
CHICAGO, April 3.-The experi-
ence of the Federal Government in
lending on real estate proba -ly will be
considerably less favorable than here
tofore anticipated, judging from 1886
results, it was stated by the Mortgage
Bankers Association of America,
which has completed study of the
field.
George H. Patterson, association
secretary, said the study took into con-
sideration the fact that loans made
by H. o. L. c., Federal Farm Mort
gage Corp. and other similar agencies
were of emergency type and also made
allowances for present rising real es-
tate prices and declining foreclosures.
The study was based on the increase
In amount OF real estate owned and
offered for sale by nearly 60 Federal
agencies in 1885.
93l Per Cent Gain.
Patterson continued:
value Of real estate owned and
held for sale by nearly go Federal
credit agencies made their first wide
advance last year. The average in
crease for the five principal agencies
was 93l per cent, and the prospect is
that this gain will probably be main
tanned for two years at least Value
of real estate held for sale by the
H. o. L. c. increased about "a times
during 1896, and that of the Federal
Farm Mortgage Corp. about % times.
Land banks real estate for eale in
creased 80 per cent, r. F. Cs gained
79 per cent and P. w. AS increased
SO per cent.
The large amount of property
taken over by H. O. L. c. and Federal
Farm Mortgage Corp. was to be ex-
pected because most of their lending
was done to relieve a national emer-
gency and must be considered in that
light rather than from the standpoint
of previous lending experience But
the gain in value of all real estate
owned and held for sale by Federal
agencies of from nearly sll6,0OO, 900 in
1885 to more than $3.50 100000 in 1886
indicates that the ultimate total of
all property to revert to the Federal
Government will be much higher than
anticipated.
Eventual Losses Uncertain.
what losses will eventually accrue
to the Government cannot be est
mated because the property held un-
doubtedly will not be dumped 1t is,
OF course, entirely possible that losses
mo he o{o or,t
market continues to rise A large por-
tion Of the Governments urban real
estate, as is the case with many pri-
vate lenders, is of the type that will
require moderniZation to be accept
able to buyers. This is a bright SPOT
IN the picture, indicating further in
creases in employment and activity
In the building trades.
The total amount Of real estate
mostly urban, owned and held for sale
by Government agencies, commercial
and savings banks, mortgage and life
insurance companies and other private
lenders probably amounts to about
S3,6O0,000.000 now, gain of nearly
sl00,000,000 since December 81. 1t
has been estimated that this total will
be more than $4,000, 900, 900 in the next
year and half, with prac ;ical.y all
OF the gain represented by increased
holdings OF the 'ederal agencies.
While it Is not accurate to Judge the
Governments real estate lending ex-
perience from the previous record II
private lenders, because much Of it was
the emergency type, yet the wide ad-
vances shown in 1886 IN real estate
taken back probably indicates that the
final results will likely De less favor
able than previously thought"