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TABLE IX—Percentage of cities reporting rising, steady, or falling interest rates
on mortgage money
To Board Presidents and Secretaries:
On the following pages of this letter are a number of questions on which we would like to get the consensus of opinion of your board. The questions have been reduced in number and simplified so that they may be answered by a cross or check mark in the appropriate blank,
The reports we publish do not show the replies made by individual cities. The published report shows only a summary of conditions prevailing in the nine geographical sections of the United States and Canada.
The general public as well as realtors have shown a steadily increasing interest in these reports. The larger the number of boards reporting the more valuable are the results. We would like, therefore, to have every board in the National Association return this questionnaire properly filled out.
We will greatly appreciate it if you will return this report at your earliest convenience, and not later than December 1 in any event. We will not be able to use reports reaching us after that date. Very truly yours,
H. U. NELSON, Executive Secretary.
I. Condition of the market :
city as compared with November, 1930?
(3) Less active.
(1) Is your city overbuilt in single dwellings?---
(1) Is there any overbuilding of apartments in your city?
IV, Business buildings (check one only) :
(1) Is there any overbuilding of business buildings in your city?-- X (2) Is there a normal supply of business buildings in your city?--
(3) Is there a shortage of business buildings in your city?-----V. Subdivision market (check the word which indicates the present
market for subdivision or suburban lots at this time as compared
with November, 1930) : a. More active --b. Same---c. Less active_-
X VI. Residential rents: a. Unheated single-family dwellings detached and semidetached
(check the word which indicates the present tendency of
rents for this type of structure) :
X b. Unheated duplexes or flat buildings (check the word which in
dicates the present tendency of rents for this type of
X c. Heated apartments. (Apartments include all dwellings of more
than 3 family units having more than 2 rooms each, but not in-
compare with those asked a year ago?
a. Higher b. Same
asked a year ago?
x (2) In outlying districts.
in your city. (Check one only.)
(1) Capital is seeking loans.
1 Very little mortgage money is available in Detroit, loaning agencies baving shut down completely on speculative construction, and will loan only when a house is completed and sold. Money seems available but tight.
Mr. NELSON. I have here telegrams from organizations such as the Southern Oak Flooring Industry.
Senator WATSON. I think that encumbers the record too much.
Senator Watson. What is the general résumé? Will you make a general statement of what they contain?
Mr. NELSON. There are in connection with 554 local real-estate boards, 120 groups of real-estate owners, in which we have 14,000 property owners enrolled, and of these 120 groups, some 40 or 50 have held meetings on this particular subject and have expressed their interest and approval of this bill.
Senator Watson. They are for the bill, are they?
Senator Watson. If you want to, you can say who they are ,but do not read the telegrams.
Mr. NELSON. This first one is from the Dayton property owners division, of Dayton, Ohio. This happens to be a telegram from the Southern Oak Flooring Industry. This is from Madison, the property owrers' organization there. Here is one from San Bernardino, Calif.
Senator BULKLEY. What is that Madison? Is that Madison, Wis.?
Mr. NELSON. Yes. Also the Louisville Real Estate Board and the Louisville Property Owners Association to-day passed a resolu. tion in favor of the home loan banking bill.
Massillon, Ohio, Mr. 0. T. Swan, secretary of the Northern Hemlock and Hardwood Manufacturers Association, wires that they have formally acted on this matter.
George W. Pearson, president of the Real Estate Board of Memphis, states that their property owners' division represents 40 per cent of the real-estate owners of Memphis and they heartily indorse the home loan bank bill.
The property owners division of the New Orleans Real Estate Board, of the San Francisco Real Estate Board, of the Ann Arbor (Mich.) Real Estate Board; Rockford, Ill.; Springfield, Ohio; Mr. Ireland, chairman of the property owners' division of Cincinnati; Burbank, Calif. Also a resolution from the annual convention of the General Associated Contractors.
Senator WATSON. All right, Mr. Nelson. We are much obliged. Mr. F. W. Norris.
STATEMENT OF F. W. NORRIS, BOSTON, MASS.
Senator WATSON. Your name and address, Mr. Norris.
Mr. Norris. Realtor, mortgage broker, and home builder and subdivider. We have different divisions in our office. We have a brokerage division, a home building and subdividing division. and then a mortgage business.
Senator Watson. How long have you been engaged in this business?
Mr. NORRIS. Since 1904.
Senator WATSON. Are you interested at all in building and loan associations ?
Mr. NORRIS. I was formerly, up until four years ago, president of a cooperative bank in Massachusetts. Our_building and loan associations are known as cooperative banks. I resigned as president of that institution and also director of several commercial banks at that time, because I was taking up work that took me away so that I could not attend directors' meetings.
I represent the Boston Real Estate Board, of Boston, Mass., with about 600 members, besides a large membership of property owners. The Boston Real Estate Board called a directors' meeting, at which they invited a number of savings bank officials, at which time this bill was considered. It was gone over very carefully, and this vote was taken, which I will read to you and then file it with you:
FEBRUARY 15, 1932. Vote passed by the directors of the Boston Real Estate Exchange at a special meeting held on December 22, 1931, a quorum being present and participating:
“ Voted, that the directors of the Boston Real Estate Exchange are in favor of the establishment of a Federal home loan discount bank as outlined in bill 5090 of the House of Representatives and are in favor of giving their support to said bill including any amendments or substitutions that do not materially change its effect."
A true copy.
CHARLES E. LEE, Secretary. I also represent the Cape Cod Real Estate Board, of which I am a member and past president. The Cape Cod Real Estate Board has members from all over the county. They are also unanimously in favor of this bill. I haven't got an attested copy of their resolution, however.
Senator Watson. Why are you for it? Tell us briefly and succinctly why you are for it.
Mr. NORRIS. I would just like to give one thought. I sympathize with the mortgage bankers because when this was taken up in my office the manager of our mortgage department opposed my favoring it, strictly from a personal standpoint. He felt it was going to cut into our brokerage commission business, where we were buying and selling mortgages and placing mortgages.
Senator WATSON. Do you think it will ?
Mr. NORRIS. I believe it will, somewhat. It is going to make the securing of mortgages easier for the home owner. Personally, my time is almost entirely at the present time, in home development, subdivision, and building and developing work. I am strongly in favor, from past experience of 27 or 28 years in the real-estate business, in the mortgage business, of something like this. The situation is especially difficult at this time. In Boston, Cape Cod-in fact, I have an office in Springfield, Mass., also—for the past eighteen months it has been practically impossible to secure a mortgage on a home.
Senator Watson. The homes you have been helping to build in Massachusetts or near Boston, principally, have you been building them through building and loan associations!
Mr. NORRIS. On our lower priced homes we have done a great deal of business with our cooperative banks.
Senator Watson. You call a cooperative bank a building and loan association ?
Mr. NORRIS. Building and loan associations in our State are called cooperative banks.
Senator Watson. They are synonymous ?
Mr. NORRIS. They are the same thing. They are conducted on the same basis as your building and loan associations, only they are known as cooperative banks. They sell shares. They do not take deposits or do a general banking business.
I just want to give you one or two illustrations of this present situation. A young man, a man about 40 years old, had a position with one of our banks in Boston, at a good salary. He was assistant vice president. The bank was merged with another institution approximately a year ago, and he had been out of work. He owned his own home free and clear. He had a son in college and a daughter in school and his family to support. He came to us back here in September to try to secure a first mortgage on that home. He said that he had been to a number of institutions, banks, and could not get a first mortgage. His home he paid $15,000 for. It was easily worth $12,000 under the depressed conditions. He wanted to get a mortgage of $5,000. It was not a question of the size of the mortgage, but he just could not get it. He had to go to the Morris Plan Bank and secure a loan of $2,000 to tide him over and pay 1 per cent a month for it. That was one of the things that impressed me with the real need of this institution.
Senator Watson. Is that an isolated case or is that general ?
Mr. NORRIS. That is not an isolated case. I could quote you many of them. I could give you the story of a lady who was in the office within the past three weeks. She paid $14,000 for a 2-family house. She paid when she purchased it $3,000 in cash, taking a first mortgage of $9,000 from one of our commercial institutions in Boston. She paid the second mortgage of $2,000 down until there was only $300 left. She had a $1,200 deposit in a commercial institution where her first mortgage was held. That institution got into financial difficulties and was closed. The $1,200 deposit was applied to her $9,000 mortgage and a demand made for the payment of the balance. She was unable, she said, to get that, and that mortgage was sold by the institution or was being sold, she explained to us when she was in the office for her money, to a broker, who purchased it because he was buying it at a discount, for $7,000. Yet she could not find a bank that would consider that loan, because our cooperative banks at the present time and for many months have been unable to consider any loans. I think most of our cooperative banks are in good condition, but frozen. They are unable to pay out money, a good many of them. Some of them are still able to pay out money, but they are not considering mortgages of any description.
One of the serious difficulties we have had throughout Boston, and Massachusetts as a whole, has been that many of our banks there are State institutions with a saving department. They have had withdrawals in the commercial department. They have become frightened at the present conditions, so they have tried to liquidate, to get themselves in a very liquid condition, so they could advertise