Evening star., 1962-05-19

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title to FILA In exchange for
debentures for the outStand-
ing loan balance and some
additional costs.
The insurance does not
protect the home buyer
against losing his property.
How Agency Helps
Then what does it do for
the home buyer? Why have
more than 6 million people
used FILA mortgages to fl
nance homes?s
Here are some Of the
answers:
First, because FILA mort
gage insurance protects the
lender against loss, the lend
er is able to accept a smaller
downpayment and allow the
home buyer a longer time to
repay his loan than might
otherwise be possible.
This brings home owner
ship within the reach Of
many thousands Of families
who might have to postpone
it for years II FILA financ-
ing terms were not available.
Second, before inSuring q
mortgage under its regular
home mortgage program.
FILA Is required by law to
determine as well as it can
that the transaction Is eco
nomicaIly sound. The law
provides that the mortgage
payments must be within the
home buyers reasonable abil-
ity to pay.
FILA therefore reviews each
application very carefully be-
fore deciding that the trans
action is one that the home
buyer Is justified in under
taking and able to undertake.
Inclusive Payment
Homes are financed under
the FILA system with first
mortgages only. With q few
exceptions. second mortgages
are not allowed. The month
ly payment includes interest,
the FILA mortgage insurance
premium, part Of the loan
principal, and amounts for
taxes and property insurance
in other words, all the eX-
penses Of financing the prop
erty.
FILA appraises the property
as part of its review. The
builder or seller is required
by law to give the home
buyer a written statement Of
the FILA appraisal, and II the
purchase price Is higher than
that amount the buyer can
withdraw from the transac-
ton.
If application for mort
gage insurance is made be-
fore construction Of the house
is begun, the property must
meet FILA minimum stand
ards Of design, construction,
and location, and FILA makes
inspections during construc-
ton.
The builder or seller must
give the buyer a warranty
that the property conforms
substantially with the plans
and specifications on which
FILA approval was based.
Not a Guorontee
FILA appraisal and inspec-
tions, and the fact that FILA
accepts q property for mort
gage insurance are not q
guarantee Of good construc-
ton.
Their purpose is to assure
the FILA that the property is
adequate security for the
mortgage FILA Is being asked
to insure. This assurance,
however, also gives the buyer
O measure Of protection.
II unforeseen circum-
stances beyond the home
owners control make it tenn
porarily impossible for him to
make his monthly payments,
FILA. If the lender so re-
quests, will approve the ar
rangements between the
home owner and his lender
for forbearance, or the lender
can assign the mortgage to
FILA.
This agency does not wish
to see any home owner lose
his property through un-
avoidable default, If there Is
q reasonable chance that he
can bring his mortgage into
good standing in q reasonable
time.
Big Influence
FILA has had a tremendous
influence on home building,
home selling and home fl
nancing.
Long-term mortgages rep
reSenting q high percentage