ORIGINATIONS AND HOLDINGS OF FHA PROJECT MORTGAGES
BY TYPE OF INSTITUTION, 1954

is shown in Chart 26. Savings banks and insurance companies held nearly the same proportion of project mortgages, 37 percent and 35 percent respectively. State banks and miscellaneous companies (retirement and pension fund systems, Comptroller of the State of New York, Investors Diversified Services, etc.) ranked third and fourth respectively, yet each held only 8 percent of the total. The share of mortgages in force held by Federal agencies (the Federal National Mortgage Association) rose slightly from 2.4 to 2.9 percent, with the largest increase under the Section 908 program.

Purchases and Sales of Project Mortgages

Transfers of project mortgages in the secondary market involved $338.5 million in 1954-one-fifth less than in 1953. However, all project programs which were operative during the year showed increased activity-Sections 207 and 803 one-fifth more and Section. 213 (all management-type project mortgages) a 5-percent increase. Section 908 more than doubled its volume. The decline in the volume of secondary market activity was due solely to the sharp drop in the volume of transactions involving mortgages insured under Section 608 which accounted for only one-tenth ($35 million) of the 1954 total compared to $180 million in 1953. The largest proportion

TABLE 43

Purchase and sale of FHA-insured multifamily housing mortgages by type of institu

tion, 1954

of the secondary market activity during 1954 was attributable to the Section 803 program (55 percent), while Section 207 ranked second with 17 percent of the total. Section 908 accounted for 11 percent and Section 213, the least active, for 7 percent.

Savings banks were the leading purchasers during 1954 with Federal agencies (FNMA) accounting for nearly the same volume-31 percent and 29 percent respectively. While ranking the same as in 1953, FNMA increased its proportion from 22 percent and savings banks decreased theirs from 32 percent. Two-fifths of the purchases by savings banks and two-thirds of those for FNMA were Section 803 mortgages. Table 43 and Chart 27 show the volume of purchases and sales for the various types of institutions for project programs.

PURCHASES AND SALES OF FHA PROJECT MORTGAGES
BY TYPE OF INSTITUTION, 1954

More than one-half of the project mortgages sold in 1954 were sold by State banks (32 percent) and National banks (25 percent), yet combined, they accounted for only 5 percent of the mortgages purchased. Federal agencies, with 24 percent of the dollar volume, ranked third in sales-mostly Section 803 mortgages. Mortgage companies (13 percent) were the fourth ranking sellers while the remaining types of institutions including savings banks, the leading purchasers, sold only 6 percent.

Property Improvement Loan Financing in 1954

At the end of 1954, there were 7,300 approved Title I lending institutions. More than 5,000 of these lenders have been active in the period since 1950 (under the 1950 Reserve) with an average of approximately 3,600 institutions a month reporting some activity in 1954.

Home modernization activity by type of financing institution under the 1950 Reserve and for the year 1954 is summarized in Table 44. The distributions indicate that commercial banks have financed the bulk of the loans-84 percent in 1954 and the same proportion in the cumulative operations under the 1950 Reserve. Finance companies and savings and loan associations have originated the major portion of the remainder.

The total experience under the 1950 Reserve is shown in Chart 28. State chartered banks, the second ranking type of lenders, have the best record, as reflected in their claim ratio of 0.92 percent which is significantly less than the national ratio of 1.12 percent. Savings and loan associations also report a lower than average ratio of 1.03 percent.

TABLE 44

Origination of FHA-insured property improvement loans by type of institution, 1954 and 1950 reserves

INSTITUTIONS ORIGINATING PROPERTY IMPROVEMENT LOANS
AND RECEIVING CLAIM PAYMENTS, 1950 RESERVE, 1950-1954

During 1954, national and State chartered banks financed well over a million loans with net proceeds totaling $748 million. These same institutions also received $8 out of every $10 in claim payments made by FHA during the year under the Title I program (Table 45) a proportion which is in keeping with their originations of such loans. Nevertheless, it appears significant that national banks have had a larger than usual share of loans go into default. These defaults result in claim payments and are reflected in the increase in the cumulative claim ratio for national banks under the 1950 Reserve from 0.83 percent in 1953 to 1.19 percent in 1954. (It should be noted that claims paid in any year are not necessarily related to insurance written during that year but are related rather to the volume of insurance outstanding.)

A comparison of the 1954 percentage distribution of net proceeds of Title I loans originated by type of lending institution with the distributions for selected other years is shown in Table 46.