Evening star., 1938-04-16
LOANS STO|MPROVE
PROPERTYBACKED
Bankers Push Advertising
Campaign to Aid F. H. A.
Funding Program.

Endorsement of Federal Housing
Administration property improve
ment loans was voiced today by the
District Of Columbia Bankers Asso-
citation. now engaged in its third CO.
the promotion Of such loans.
I'VE know from our own experience
that the property improvement loans
made under Title l are good and safe
business for the banks" Thomas j.
Groom. president of the association,
says in an article appearing in the
Insured Mortgage Portfolio, ofiicial
publication Of the F. H. A.
Yet we are carrying through this
campaign primarily for the purpose OF
stimulating the local employment sit
uation which means ultimately even
better business for the banks" Mr.
Groom continued. I'VE recognize
that work in the building trades is the
most urgent need at the present time
for business as whole. We know,
also from our own experience. that
cooperative newspaper advertising OF
Title loans is an effective means Of
stimulating building activity"
Speedy Cooperation Given.
Mr.. Groom said his associations
frst cooperative effort to promote in
sured loans for modernization and i'm
provements Of existing structures be-
gan Immediately after the original
modernization credit plan was put into
effect by the Federal Housing Admin
istration in September. 1884. The
second began when the plan was am
pGfled and extended in April, 1885.
Its third began shortly after passage
OF the amended National Housing Act
last February 3. which restored this
type OF loan to the measure.
Results Of these two campaigns
were beneficial to the cooperating
banks, to the borrowers, to contractors
and builders, to workers in the build
Ing trades and to the public" Mr..
Groom wrote The 81 District in
stitutions made lo,626 loans for a
total of S5.38S999. Loans made for
Improvement of properties within the
District numbered 9.l72, totaling S4,-
568,035, Thus far the F. H. A. has
been required to pay few claims in
connection with these last Eight of
the institutions, in fact, have vet to
submit single report of loss on loans
made in or out of the District"
The campaign, which Mr. Groom
described as a good example of prac-
tical cooperation among banking in
stltutions," is simplicity itself. It
consisted of a series of quarter-page
newspaper advertisements, prepared
and placed periodically by a local ad-
vertHlng agency, with the cost being
borne by the cooperating institutions
IN proportion to their total resources
Loans Made at 8 Per Cent.
Mr.. Groom said his association felt
that maximum stimulation of home
improvement work and employment
could be obtained only by offering
property improvement loans at the
lowest rate at which the banks could
reasonably afford to make personal
monthly installment loans. Hence
1t was decided to Ak the maximum
charge for loans offered in the CO.
operative campaign at 8 per cent. the
regular legal maximum for loans of
this general type in the District.
predicated on the belief much larger
volume Of new business would be
Forthcoming at this rate than if the
maximum limit allowed by the Ma
tlonal Housing Act were employed.
Past experience gives us every rea-
son to expect satisfactory volume
OF business from this cooperative
campaign" Mr.. Groom said. There
Is nothing bizarre or even novel about
the copy-just the simple story of the
benefits available to the property
owner through the revived Title /
1oapep