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Show Farm Loans And Mortgage Refinancing C. V. Warburton, U. S. Director of Agricultural Extension work has ju.st sent a copy of a radio talk given giv-en by Henry Montgenthaw Jr., on Farm Leans and Mortgage Refinancing Refin-ancing which considers the bill dealing deal-ing with Farm Credits, part of the new law just passed by congress. The general purposes of the mortgage mort-gage refinancing, part of the farm relief bill, are first, to reduce the "debt burden now carried by farmers'' farm-ers'' and provide terms which will lead to possibility of working out their debt situation and second to provide better means on a permanent perman-ent basis for meeting the farmers land-loan need." Farmers whose mortgages are held by any of the 12 Federal Land Banks may receive benefits directly under the new act, it is explained. Rates of interest is now between 5 and 6 per cent. In 60 days after approval of the act the interest rate will be 4'i per cent and must remain so for the next five years. "The banks are enabled to make this immediate reduction in interest thru authorization of $15,000,000.00 for this purpose." Any borrower receiving re-ceiving loans in the next two years in connection with the land banks will get the benefit of these low rates of interest under the new act, some leniency is provided for both principal and interest payments. The above provisions effect 400,-000 400,-000 farmers in the country but this includes only one-eighth of the farm mortgage debtors. Another part of the act authorizes banks to issue $2,000,000,000 of a special type of bond "on which the rate of interest inter-est may not be more than 4 per cent. It is explained that with the funds provided the Federal Land Banks may do two things. First, from the sale of bonds new loans may be made on some good terms granted to present borrowers and second they may exchange the bonds for farm mortgages basing the exchange ex-change on the value of property covered cov-ered by the mortgage". The exchange, however, it is explained ex-plained shall not be more than one-half one-half the "fair normal value" of the appraised land plus 20 per cent of value of permanent improvements on the land. "When mortgages are thus purchased pur-chased by the land banks at a reduced re-duced figure, the farmer borrower will reap the benefit." Other provisions are included in the act. For reducing land sold under foreclosure and obtaining funds to continue operation of the farm loans are made. Individual loans in no case cannot exceed $5,-000.00 $5,-000.00 to be paid in period of 13 years and are to be paid in the last 10 years of this period interest being collected only during the first three years. It seems that within a month, the Farm Loan Commission, supervising authority over Federal Land Banks will be a part of the Farm Credit Administration. "A new agency of the government," which will have the responsibility for all the various classes of loans. Farmers wishing to apply for loans or those who have mortgages which they wish to exchange for interest-guaranteed interest-guaranteed land bank bonds must get in touch with the land bank of this region. Our district is District No 11. Address: Ad-dress: Federal Land Bank, Berkeley, California. |