Evening star., 1939-01-07

llewI 0IIIIIICS
Large investment in
F. n. A. !. Cited by
Head of Company
Financing M living quarters fot
more than 11,o00 families has been
provided through loans made By
the New York Life Insurance 90.
under the insured mortgage system,
Of the Federal Housing Authority,
according to Alfred L. Aiken, prest.
dent Of the company, writing IN the
forthcoming issue OF Insured Mort.
sage Portfolio. olIlciAl publication Of
the Federal Housins Administration.
Mr.. Aiken declares his company
had taken about t00, ,0oo, 900 of
r. H. A.-insured loans through last
November / ana had issued commit
ments for additional loans In excess
Of $4,000, 900. These opesations
have been conducted In both the
large-scale rental housing and the
1mall-home flelds.
The New York Life Insurance
Co has q large investment Of its
policyholders' money In r. H. A.
insured mortgages, which will prob
ably be increased" Mr.. Aiken writes.
"It therefore has q great and con-
knuing interest in the future activi-
ties and success Of the F. H. A."
New York Life had closed loans
aggregating $1s,ss2, 900 on large
scale rental properties located In 13
States and the District of Columbia,
and had additional unclosed COM
mitments Of $1,9l1 900. Rental hous-
ing projects financed by the COM
pany, many OF them already in
operation, provide 4,s2s dwelling
units.
S31,655, ~ Mortgages.
The company had taken $31, ,655,-
900 OF r. H. A.-insured small-home
mortgages ana had additional out
standing commitments Of $11, ,300,-
600, as Of November /. On that
date the company had originated or
purchased 6,085 Of r. H. A.-insured
anall-home mortgage loans. It had
purchased approximately Is per cent
Of all the r. H. A.-insured home
mortgages bought by life insurance
companies from originating mort
Eage lenders.
A multiplicity Of reasons prompted
his company to embark upon its
substantial investments In insured
mortgages, Mr.. Aiken says.
IAN r. H. A.-insured mortgage,
he writes, mot only has the ad-
vantage Of the security afforded by
the property, but, If default occurs,
becomes 4 potential bond rather
than = potential real estate owned
Too often in the past the mortgage
has found himself an unwilling
owner Of property covered by his
mortgage, with all the problems
that such ownership entails.
Entitled 70 Debentures.
This possibility is eliminated with
r. n. A.-insured mortgages, for II
the mortgage is foreclosed the mort
Eagee Is entitled to receive deben-
tures Of the Mutual Mortgage or
Housing Insurance FUNDS, the prin-
sipal and interest of which are
guaranteed BY the United States
Government.
''Lons-term Amortization under
the +. H. A. plan also creates IN in
ureAsins equity in the property
which serves as 4 growing margin
ct safety, as well As 4 growing in
ducement to the owner to leave no
rtone unturned to Keep his property.
In this amortization lies, In no
small degree, the virtue Of these
loans"
Mr.. Aiken says the real security
behind insured slnAll-home mort
gage loans is not confined to the
brick and mortar value Of the house.
He declares the character and credit
standing Of the owner are certainly
Of equal Importance" while the
r. H. AS searching investigation
to determine the character, credit,
and earning capacity Of the owner
contributes greatly to I sound ap-
praisal Of the risk.
Constructive Contribution.
This practice may not be gen.
orally adopted by lending irlstitu-
sions for uninsured mortgages In
lower loan value ratios, because Of
competition between lenders" Mr..
Aiken writes. ut might well be.
The r. H. A. has shown the way
and 1t 10 4 constructive contribution
to mortgage practice"
Mr.. Aiken 7lauds the development
Of the garden-type apartment,
which, he says, marks I distinct and
favorable real estate trend, for
which the r. H. A. is entitled to
credit.
Properly located, financed, built,
and managed, such apartments
should be eminently successful -
Mr.. Aiken asserts, land these fac
tors are given most careful consider
alton by the r. H. A. before it agrees
to insure 4 project. Under this
scrutiny, construction ID apparently
Of substantially better quality than
has prevailed in the past.
THE limitation Of dividends, the
stock control, and supervision by
the r. H. A., under contract With
the sponsors, should protect the
morteases and insure the continued
success Of the operations"
MetropoIifun MamorioI IA. (.