Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-05-30
Continued From First Page


sales prices. he said, NCHA
"could not proceed with its de-
velopment of public housing be-
cause of statutory price restric-
tons"
He charged the decision would
encourage speculation and con-
spiracy" and result in "a virtual
guarantee to spectators dealing
In slum properties of recovering
100 cents on the dollar for their
second and third trust paper"
His letter said it was common
knowledge" that Stun houses I'M
Washington now are being sold
on two bases-'wholesale' and
RETAIL"
Wholesale sales, he said, are
those for cash, or substantial
cash with a first trust, at price
near the cash market value of
the property. Retail sales. heI
said, are those lat a small or
token down payment. with de-
ferred purchase money mort
cages at greatly inflated prices. y
RIA officials, who also have
urged a review of the decision.
gave this actual example of one
Southwest retail" sale on land
1t has acquired:
Investor "A" bought a prop
erty in December, 1913, for &c.
500 A reputable lending insti-
tuition appraised the property at
$4,000 and issued a first trust
of $4,000. In February, 1851,
the property was sold for SILL
$50. The buyer paid $500 down.
assumed the $4,000 first trust
and obligated himself to a Sec
ond trust of $4,000 and a third
trust of S2,450, all held by the
original investor. Monthly pay
ments 10 the trust holder came
to $3.50. On March 81, 1855,
the investor foreclosed because of
payment defaults, and three
months later sold the property
to the RIA for $3.50.
The NCHA letter said the
sales trend" in Stun properties
probably was initiated as a re-
Sillt nf rent cOntfn1
such practice is more profit
able. since the purchaser as
sumeS all the expense. whereas
in renting the landlord has in
surance, taxes, maintenance and
repairs, ETC. In the event the
purchaser defaults, there is
foreclosure and the house is re-
sold for a down payment, in
some instances. as low as $50
or SIS"
Capper Dwellings Cited
In 1854, Mr.. Simpson said,
NCHA negotiated the purchase
OF 249 out of $50 land parcels it
acquired near the Naval Gun
Factory for the Arthur Capper
Dwellings public housing prof.
ect in Southeast Washington.
He said this was a "long and
painful process" because NCHA
insisted on second and third
trust discounts as we'll as wal
vers from the holders :. of de-
flciency judgments against the
home owners
In some cases, he said, dis
counts of the trusts went as high
as so per cent of their face value.
He said the agency was able to
get most of the home buyers tout
without any cost" and was able
to get varying amounts of money
for them IN some cases." In one
instance. he said. payments were
set up so that the amount Of
money that went to the princi-
pal of one trust was only n cents
q month.
RIA, acquiring property for
redevelopment projects, said it
was able to negotiate purchase
of about 18 properties which had
multiple trusts and sales prices
far beyond appraised values. In
these cases, it also required wal
vers of future judgments against
the home-buyers.
Most Prices Set by Courts
In most such cases, however,
such RIA acquisition prices were
set by condemnation courts.
One study showed about so in
stances In which the condemna-
ton awards were far below
prices for which the houses had
been sold. Most of these court
awards were accepted, and the
Riley case was the only one APP
pealed. as
In cases where condemnation
awards were accepted. home
buyers who had obligated them
selves to higher sales prices re-
main liable to judgments. RIA
officials said that as a practical
matter, however, few of the
judgments are filed because the
trustholders know there isn't
much chance of collecting
Mr.. Simpsons letter said the
NCHA was "acutely aware of the
plight of many low-income fam
lilies in the District of Columbia
such as Mayme Riley"
I'VE recognize the equities in
their favor when the houses they
are buying on deferred mort