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Show 1 ' 7 ' ' - i :: . - - - I f u r -- i ? t L J lL!' f sl . ' r. fM - r i S ti i i tt iv- ft S1 '.I .I - if J :, 1 i : T f j 3 . Business news and commentary f Volume 7 Number 3 ? ) ) f !! i k 4- t Utah lenders have mixed feelings about variable rate mortgages Industrial growth is inevitable, economist predicts Utah will step ahead of at least 45 other states in population and industrial growth in the next five years, according to Thayne Robson, director of the Utah Bureau of Economic and Business Research. ' 50 cents Reasons for the growth are compound, Robson explained to Vitt Media executives during their recent visit to Salt Lake. The state sits in the fastest growing part of the the Rocky Mouncountry tain region, where the population growth is eight to ten percent above the national average. Also. Utah is rich in oil shale, uranium and coal natural resources whose full potential arc only beginning to be developed, he said. Another reason for growth in Utah is what Robson called by Mary McMillan Gaber Since 1968, Utah population has grown about 2.5 percent annually, 65 percent of which is internal a rate that makes Utahs birthrate double the national average. Utah produces about 26 births per one thousand persons yearly, but this does not discount the great influx of people from Robson added. (See GROWTH, page 13) out-of-sta- te, SLC is an undervalued market 30-ye- ar Salt Lake City is one of the most seriously undervalued Just a gimmick the advertising markets United States, Stanford B. Silverman said alter completing his study of the valley last The Flip loan is a gimmick to sell private mortgage insurance," scowls one mortgage lender. in vice-preside- nt Developers have abandoned their interest in Park City's proposed Norfolk Subdivision, leaving Jack Sweeney, also of Salt Lake, alone in the project. New, alternative mortgage instruments, popular in California since early 1975, are under intensive study by the Federal Home Loan Bank Board and secondary market participants. And one mortgage company, Flip Mortgage Corp. of Newtown, Pa., has initiated an intensive marketing campaign to sell what it calls Flip Loans. But, so far, neither these nor mortother variations of the standard, gage loan have found Utah fertile ground for acceptance. the bounce back" syndrome. week. Migration to the West Coast continues while jobs there are of Silverman is scarce, he explained. Since Vitt Inc. in Lake Media Salt International, unemployment York New of is well 5.7 at City, the largest valley percent below the national average, independent media buyer in the country, handling acmany people who intended to counts like Dow Jones Insettle in California bounce" to Salt Lake City on their dustries, IT&T and J.C. return east. Here, where jobs Penney. Each year, Silver- are available, the people (See UNDERVALUED, page 13) Two Salt Lake City developers Homebuilders, real estate agents and lenders in both California and Illinois seem to regard new mortgage loan repayment plans as manna from heaven. But here, in Zion, lenders look at the innovative variable rate mortgage and Flip loans with dubiety and mistrust, skeptical about promised benefits for cither borrower or banker. probably only develop 12 of the acres as a result of legal problems he now faces in the city. The variable rate mortgage is too hard to sell to the customer, says another. The Flip loan was developed by Alan Smith, president of Flip Mortgage Corp., and presented to the public for the first time in Chicago, 111. in May, 1977. The first Flip loan was closed just last week by First Federal Savings and Loan of Gainesville, Georgia, and, according to a spokesman at Flip Mortgage, so-call- ed Park City expects Sweeney to foot an SI 8,000 bill for road construction in the Butkovitch Property, a major portion of several others were expected to be closed in Illinois this week. First payments smaller Aimed at young homebuyers whose incomes will grow, the Flip loan concept calls for the borrower to deposit what wrould have been a downpayment on a home (about 10 percent of the purchase price) in a savings account with the lending institution. Money is regularly drawn from that account, which is earning about five percent interest, to subsidize the monthly mortgage payments made by the young homebuyer. In this way, the theory goes, the lender gains a new savings account. And although the total monthly payments stay the same, the home-buymakes small monthly payments at first, gradually increasing his portion of the payment and decreasing the amount drawn from the account, as income grow's. er Flip has developed a complicated formula to determine the customer's potential fot income growth and exactly how much a customer can expect to pay directly each month, and how much the bank can expect to drawr from the account. Successful selling tool This concept has been wrcll received in Chicago," asserts Fred Wells, a Flip spokesman. He says U.S. Homes, one of the nation's largest homebuilders, has maintained the Flip loan as a successful selling tool for its houses in Illinois. Wells also lists two other large Illinois the Norfolk site. Before his purchase of the property five years ago, landowners there asked the city to assess the (Sec MORTGAGE, page 6) area for construction of a platted but nonexistant road. (See PARK CITY, page 14) Following several problems which arose in the project last week, Wally Wright, developer of Trolley Square, and John Prince, partner of Prince. Greer, Langheinrich and dropped out of Sweeney's plans to build a subdivision Norfolk Avenue hillatop the side. mid-six-figur- e" Heading the list of problems was a construction denial for c site from the the Park City Planning Commis126-acr- sion. Sweeney hopes to modify his construction plans to include only single-famil- y dwellings to meet zoning density requirements. He adds he will Though Park City planning commission dashed hopes for the Norfolk subdivision, developers Price, Sweeney and Wright will proceed with a 3,000 foot Alpine slide, scheduled to open Aug. L |