VOLUME XXXIII MAY, 1954 NUMBER 5 Table of Contents
An Abstracter's Liability ...... 2
John W. Warren
Open End Mortgage (Panel Discussion) ...... _...... 9
Lawrence R. Zerfing
Charles M. Swezey
Lyle W. Maley
Growth of Life Insurance Company Mortgage Investments ...... 18
Coming Events ...... 26
Code of Ethics ...... 27
[ 1] TITLE NEWS 0 fficial Publication of THE AMERICAN TITLE ASSOCIATION 3608 Guardian Building-Detroit 26, Michigan Volume XXXIII May, 1954 Number 5
AN ABSTRACTERS LIABILITY JOHN W. WARREN, Secretary-Treasurer Albright Title & Trust Company, Newkirk, Oklahoma
I should first like to state that it iS that no reasonable inquiry shall re difficult, if not possible, to draw clear main unanswered, . so brief that the and unmistable rules which will ap mind of the reader shall not be dis ply in each case and determine the tracted by irrelevant details, so me question of an abstracter's liability thodical that counsel may form an or non-liability. To a certain extent, opinion on each conveyance as he the particular factual situation will proceeds in his reading, and so clear enter in, but I shall try in a general that no new arrangement or dissec way, to provide you with information tion of the evidence may be re about the law of our State (Okla quired'." (1 C.J.S. No. 4.) If your homa) and the construction given it abstracts fit this pattern, you are in by our State Supreme Court which deed to be congratulated! has a bearing upon your liability. In the first place, you who engage What to Show in the business of abstracting title to We are all prone to think of our real property require special knowl liability as a result of the complete edge and skill and having engaged omission of some instrument, rather in such business "impliedly repre than from an incomplete report of sent that you possess such knowl an instrument actually included in edge and skill." "An abstracter the abstract. But we can have liabil vouches for the correcl!:ness of an ity from the failure to provide a abstract compiled and certified by statement of the "material parts of him, and he must therefore use the . . . grants, conveyances, wills or highest degree of skill and diligence other instruments." An abstract in compiling the same" "and for a should also contain instruments failure to exercise such care and which are invalid or ineffectual skill, he is liable in damages." (1 where they are such as to cast a C.J.S. No. 9.) cloud on the title; and doubtful en Though I am sure each of you cumbrances or other matters should feels well qualified, and rightly so, to be shown rather than omitted. determine what instruments and the "Every part of the documents or like an abstract should contain, I records abstracted should be set out found in preparing this paper, a which may affect the judgment of statement that I felt was so good an intending purchaser or other in that it bears repetition to those of terested person, and one relying on you who have heard it and introduc the abstract is entitled to consider tion to those of you who have not. that no part of them which is not It goes like this-"It has been said set out has any bearing upon the that an abstract should be 'so full title." (1 C.J.S. No. 4.) "A failure to [ 2] note or show an instrument of rec by reason of any incompleteness, im ord affecting or encumbering the perfections or error in any abstract title, or the omission of a material furnished by him ..." The effect of part or provision of an instrument such statute is tf:o enlarge the old abstracted, has been held to consti common law liability of the ab tute negligence as a matter of law." stracter, so that it extends to any (1 C.J.S. No. 9.) In this connection, and every person who may rely upon it is probably the better procedure the abstract to his prejudice, regard· to show that a deed contains restric· less of who ordered or paid for it. tions, and list them briefly, than to Our statute is seemingly inconsistent show a part of such restrictions per in that the first part of it states that haps fully and omit a part which may the abstracter will pay damages that later prove a serious impediment on may accrue to "any person," whereas the use of the property. By showing the latter part states that the ab such briefly, you are calling to the stracter shall be liable on his bond examiner's attention that he must to any person or persons "for view the record to see what the re whom" he should make or furnish an strictions actually are or mus
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Film sort INC. PEARL RIVER • NEW YORK [ G J moving the cloud, not to exceed the grantor. This same result might be amount paid for the property, and applied in arriving at an abstracter's the necessary expenses of defending liability, allowing plaintiff a greater the title. "If the title had failed en· maximum recovery where he was tirely, the maximum of their recov successfully sued by a third party ery would have been the amount paid resulting in a damage, than that for the land and the necessary ex which would have been allowed to penses in defending their possession." the plaintiff where he brought!: the The court then laid down il:he rule action against the abstracter and no that "the liability of an abstracter is third party was involved. not greater than that of one warrant ing the title." The court then refer Limited Recovery red to Sec. 2856, Rev. Laws 1910 The damage may be limited to the (Title 23 Okl. St. Ann. No. 25) stat cost of perfecting title as was inti ing that the measure of damages for mated in the Oklahoma case of Man breach ... "of warranty, in a grant ville ett al v. LeFlore-McCasland Ab of an estate in real property is stract & Realty Co. et al, 65 Okl. 12. deemed to be: In that case plaintiff purchased land 1. The price paid to the grantor, in reliance upon an abstract which or, if the breach is partial only, omitted showing a mortgage against such proportion of il:he price as the property. After having discov the value of the property af ered the mortgage, plaintiff paid fected by the breach bore, at mortgagee the amount of it and the time of the grant, to the sought recovery against the ab value of the whole property. stracter. Court disallowed the recov 2. Interest thereon for the l!:ime ery on the theory that the mortgage during which the grantee de was void and didn't constitute valid rived no benefit from the prop lien and that plain'1:iff paid the mort erty, not exceeding six years; gagee voluntarily at his peril, with and, full knowledge of the law, but inti 3. Any expenses properly incurred mated that the plaintiff might have re by the covenantee in defending had a cause of action for sum quired to perfect his title. his possession." men however, The Leeper case heretofore We have another statute, the dealing with the recovery to be had tioned allowed recovery against where there has been a breach of the abstracter to the extent of taxes warranty, that being Title 16 Okl. St. which had to be redeemed to prevent Ann. No. 23, which has the effect of loss of property. The court, however, damages enlarging the recovery to that of the refused to allow exemplary price paid for the conveyance of the recovered in the trial court. land at the time of the warranty, l!:he A question frequently raised is value of all improvements lost, if that of whether recovery should be any, and all sums necessarily ex allowed for costs and expenses, in pended, including a reasonable attor cluding attorney fees. It is generally ney fee, and interest at the rate of held that where there is a reasonable 10 % per annum on all sums so paid probability of defeating the action, from the time of payment. This stat the plaintiff is entitled to recover ute has been held not in conflict with amounts paid for attorneys' fees, for the one referred to in the DeVillers he is normally under a duty to use case-(see McConnell v. Goucher, 188 "reasonable means, including neces Okl. 293), and is applicable to cases sary and reasonable expenses to de where the grantee is sued bv some feat, if possible, the cause of action." third person, and has to defend in Such was the holding of the Okla some action by reason of the fault homa case, Washington County Ab of the grantor, whereas it is said the stract Co. et al v. Harris, 48 Okl. 577. measure of damages in Title ::>3 Okl. Interest on items of damage are St. Ann. No. 25 applied in actions recoverable against an abstract, in a brought by t!:he grantee against the proper case, in accordance with the [ 7] rules relating to interest on damages Secondly, I would recommend the generally; but there is no right to creation of reserves out of your interest where there has been no regular profit with which to meet actual pecuniary loss. losses. When these reserves have become substantial enough, you may How Much? wish to increase the deductible loss I think by now you can see that which is not included in the policy of your loss could be tremendous, for abstracter's liability insurance, or it is conceivable that you could have you may wish to discontinue it en more [ 8] THE OPEN-END MORTGAGE (A PANEL DISCUSSION) MEMBERS OF PANEL: Lawrence R. Zerfing, President, Land Title Insurance Company, Philadelphia, Pa.; Vice-President, American Ttitle Association. Charles M. Swezey, Assistant General Counsel, New York Life Insurance Company, New York, N.Y. (now retired). Lyle W. Maley, Vice-President, Chicago Tide & Trust Company, Chicago, Illinois. (Following is the discussion of the open-end mortgage which took place at the 1954 Mid-Winter Meeting of the American Title Association, Feb. 18-19-20, in New Orleans, Louisiana. Since this material was taken from a tape recording, much had to be deleted due to the presence of background disturbance which usually ac companies a recording of this kind where a large crowd is gathered in a large meeting room. We feel, however, that it is of sufficient interest to merit publication at this time. Ed.) LAWRENCE R. ZERFING trap or a feeling that he is covered when we might know, or do know as The President said that we had a matter of fact, rthat in some areas no manuscripts; I have never been he is not covered. It started as far able to prepare one in fifteen min as we are concerned, in 1933. The utes anyway. So I'll just try to purpose back of it was to take care ramble on and give you the history of the little home owner who had and background as I understand it. a mortgage on his property. He was If you will pardon the references I pretty well tied up at the time be will of necessity have to refer to cause of economic condirtions, and what took place in Philadelphia, be he needed some more money to put cause that is the area with which on a new roof, let's say, heater, or I am most familiar and we also have any improvements of that type. He been handling the open-end mortgage has one source generally, and that situation for just about 20 years. So was to go out and refinance entirely, I think we may have a fair back this admittedly was difficult at ground- some may have gone back that time, or he would get into the a little further but I suppose very hands of the money sharks and be few of them. obliged to pay exorbitant rates of The purpose of discussing the open interest. As I see it the agitation end mortgages are not to discuss in started with the Federal Savings and any way the philosophy in back of Loan Association. Their idea was the open-end mortgage. If a lender "let's get the money into the prop wants to make a mortgage for one erty," and they would make an addi year or a hundred years, that is his tional loan to him so that he could problem and not ours. Our problem improve his property, of course is what kind of title evidence shall be thereby improving their own security furnished to cover the open-end and that was good all-around. There mortgage. How can we best protect is no question about that. We went the lender and not let him get into a along with that at very moderate [9] rates, furnishing that type of title a coverage without making a search evidence so that they could make of the Utle records. that additional advance. I am afraid Demand for the open-end is increas that we have gotten away from that ing. I think it is here to stay, but at theory and the result now is that it least if we are going to furnish a title is not only for property improve evidence we want to be sure that it · ments but actually loans are being is furnished to these security holders made for any and every purpose in a way in which they will be com many of which are foreign to the pletely covered and which they will purpose as it was originally intended. get the full benefit of the security. Again I do not know whether that is And if ilt needs legislation to get the any of our business. As far as the method simplified, I don't know, that forms, methods and so on are con is not up to the American Title As cerned we can look at it in an over sociation or to any officer to suggest all general way. Nevertheless, the that. I think that becomes very much methods in each state must undoubt a state problem. Our idea here is edly be governed by state law. A merely to point out, as far as we survey was made on that some can, the requests that have been time ago, and many of you might made, the conditions which exist and have seen it, by Horace Russell, then I believe, leave it up to the setting out the requirements in the state's themselves, our state legisla different states. I am not sure how tures, who work out the methods complete the survey was but never under which this can be done. theless it took a position that in It's a growing proposition. I hon some states you can make advances estly believe it is here to stay on the original mortgage without whether we fancy it or not for one additional searches, others are doubt reason or another. ful, in some others you definitely cannot make those advances. As LYLE W. MALEY far as co·verage is concerned it has I didn't know that I was going been suggested from some areas to talk on this subject, but I did that this ought to be handled on a bring some things along that might casualty basis. The agitation is fairly be brought up in some casual con loud. I don't know how voluminous versation in a small group. So I it is to tell you the truth. Again, did not have it prepared. However, I don't see how title companies can I will say this - that several years furnish that type of evidence on a ago the Federal Savings and Loan casualty basis. Either a mortgage has in our county brought this question a good lien or it doesn't have a good to our attention. Over a period of lien. And, again, I say you must go some time we gave it a good deal of back to your state laws to determine thought. In Illinois you cannot make how you are going to handle that an additional advance and rely solely situation and properly protect your on the lien created at the time of the parties. When agitation arose con recording of the original mortgage. If cerning casualty insurance a maga you wish to make an advance, with zine was going to run an article one exception, it is necessary rto really pushing the idea of furnishing search the records and see what the that evidence on a casualty basis. I condition of the record is at the time shouldn't call it evidence either-it of the advance. The exception is this; is not evidence, it is a tentative guar if the mortgagee obligated itself at anty or security, but it is not title the time of the making of the orig evidence. A study was made at that inal loan to make some further dis time to try and determine what bursement of his money to llis mort states furnished or felt they had to gagor and that is obligatory, then furnish that kind of evidence and the lien securing that additional how they furnished it. We can say amount will date back to the lien of this, that in no place in which a sur the original mortgage itself. vey was made did any company say Our decisions are rather clear. We that they are furnishing that kind of have a number in the article of the [10] United States Savings and Loan dollars and maybe he has to leave League bulletin, prepared by Horace his shirt and his socks and every Russell and his assistant, and ~t thing else in order to get it. So per states in general the Illinois situation. sonal knowledge of the borrower has We have furnished to the Savings in all such transactions a very im and Loan people means of proteC'tion portant. part. I am quite sure in making those advances. We did it that many of '1:hese institutions in by a supplemental policy which we Cook County are making these ad call Form S. It is a very simple thing vances without getting a supplemen -one page-it does not cover taxes tal policy from us and perhaps with nor special assessments because nor out making any investigation of the mally the lender has an arrangement record whatever. We hope that they with his borrower whereby one· do nO't suffer loss for that reason, but twelfth of the taxes, etc. is deposited I would not wish to endorse that each montth, and usually the lender kind of practice. As a lawyer I cer knows what the tax situation is. So tainly would not-not in Illinois. this is a rather simple supplemental There may be states, as indicated in policy. It is issued on a particular Horace Russell's article, where that form of application, in which certain is a safe and sound practice, I do representations are made by the not know-! only speak with refer lender and by the borrower. With ence to '1:he Illinois situation. those representartions and a rather Some agitation has been to have quick and partial search of the rec· lenders adopt this practice of making ords- we then issue the supplemental additional advances. There has been policy. We do ~t at a very low rate. some suggestion that the mortgage, The first year that it was in oper when made, should provide for addi ation we had issued something over tional advances and that the '1:itle com 200 of those supplemental policies. pany should in its policy, originally We issued a great many policies that issued at the time of making the ori year, only a couple of hundred of ginal loan, should cover and protect them were of this supplemental form. the lender against the additional ad The following year the number vances which might be made in the jumped up to about 400. This last future. In Illinois, unless those addi year was the third year we issued tional advances were obligatory so them. The increase was something that the mortgagee is obliged to like 40 over the preceding year. So make them and could be forced to around 450 was the number we issued make them if he resisted, that un in 1953. This does not indicate any less that situation develops and ex great demand for this kind of pro ists I do not see how a title com tection. That may be partly due to pany could, in issuing its original the manner in which some of those policy, give any protection whatever institutions operate. I had the feel as to the liens securing these addi ing without knowledge that some of tional notes. I would hesitate to rec them make those advances without ommend that we attempt any such any search of the record, relying thing. solely on their knowledge of the bor I am not sneaking about the rest rower. From a business standpoint of the states but in Illinois it would that may be sound, I hope it is, but be a most dan~Yerous practice. there is the matter of law to consider. The lender who is located at a dis You know and I know of bankers, tance from the (well, we won't say when Joe Bloke came in and wanted the scene of the crime) but at least a thousand dollars, '1:hey knew Joe from the location of the property Bloke, knew his past history, they which is secudty for the loan, it knew what he was doing, they had would seem iR at a dif;adwmtage in some idea of his assets, some idea making future advances. The local of his income and they'd say "why, Savings & Loan or Building & Loan of course, Joe, here's a note, just has a knowledJre of hi-; "Bob." He sign that and get the money." But knows whether he works, he knows Bill Smith then wants a thousand how he keeps his property, he knows [11] the need for that particular amount. bursement of the house was pretty He can judge whether he wishes to near done so they let him have extend his situation by making a $8,000 out of the $10,000 and say further advance. He can judge that "gentleman, you can have $2,000 pre one page • • • She'll do 25 or more Besides . . . the girl using the Recordak Junior Microfilmer will have photographically accurate and complete copies instead of hurried, abbreviated ones which lack original signatures; which may contain transcription errors. Compar~ Costs You know what your "take off'' costs are now. Just place the following figures alongside and you'll have a good idea of how quickly a Recordak Junior Microfilmer will pay for itself. You can purchase it for $450-$1,200, depending upon model. Or rent it for $17.50-$25.00 per month. Any clerk can operaLe it ... photograph 25 or more legal-size documents in a minute's time for a fracLion of a cenL apiece. Yes, for a fraction of a cent apiece because you can record thou and of documents on 100 feet of 16mm. Recordak Microfilm which costs only $3.50, including processing charges. Also, remember, should you ever need paper print reproductions they can be made directly from your film records at surprisingly low cost. Write today for compleLe story of savings. Recordak Corporation (Subsidiary of Eastman Kodak Company), 444 Madison Avenue, New York 22, N. Y. Prices quoted are subject to change without notice. Low-cost Recordak Junior M icrofilmer- enables any clerk to photo graph 25 or more documents in a minute's Lime ... for a fraction of a cent apiece. ~1?~c tJ PtJill( (Subsidiary of Eastman Kodak Company) originator of modern microfilming- and its application to the title-abstract business ~'Recordak" is a trade-mark though, because I think it will help borrower and the home owner ought you-it certainly will help the lender. to be told the truth. I am going to ask Today, in my observation, there has your help on that line- certainly we been a terrific amount of unfortu should do our best. nate publicity on this subject. The I want to ask another question for prospeative home owner, the home you to think about. We speak of owner, the buyer, have been led to be searches here. I think you are proper lieve that this thing has been a very in stating you are not going to search casual undertaking- could knock it for taxes, etc., that is right. Are you off in the forenoon, have a big lunch going to make federal searches? Cer and then go out and play golf in the tain federal searches are required afternoon. The questions you have the federal income tax liens, the fed heard from the floor indicate your eral estate liens and things of that approach should not be casual- that kind. I certainly hope you are going this thing contains a lot of headaches to make federal searches because we for you and possibly for our good are going to look for you to make friends the FHA and for everybody federal searches. concerned. I want to say this, that I think we Every life insurance company, have a problem in every state, one or every savings bank in making a new two of tt:he things we want you to loan in the form of an advance has determine and help us on. Should we got to have an appraisal. The loan imply we have the right to do it, to has got to be picked up in the books, ask you to issue insurance on ad the note that is to evidence the new vances on a casualty basis; and, sec indebtedness for additional advance ond, would it be possible for this has to set forth how the payments group to work out some general are to be applied, whether to that new language that could be used through advance or to ti:J.e old note. out the United Sttates? At least with I think in most states the statutes in one state will satisfy the problem. are such tt:hat the parties may agree Next, I want to say this. From the under those circumstances as to standpoint of our company, our com which part of the debt shall receive pany is not urging correspondents in preferential reduction in principal. I any way to adopt any open-end pro may be wrong about that, that is one vision. In order to meet competition of the things we want to know about. with the Savings and Loan associa I want to dwell for just a moment tions, savings banks and local lenders on something which is a vital matter we had sent a questionnaire to our -this matt:ter of publicity. I consider correspondents and asked them if the publicity that is already attached they were interested and what sug to this situation. I want to go back gestions they could make. Then we to this a minute. Every national ar later wrote them and asked under ticle I have seen on this subjeat, as what circumstances and how they I said, has been most casual-doesn't could secure title insurance. Those indicate any of the ramifications. It problems have been classified by us. indicates it is a very easy and simple We know that certain states, as sug thing, and all that sort of thing. And gested by a previous speaker, for may I ask this, if you have any oppor example in Texas you have a home tunity for publicity in your own lo stead problem. cality please indicate some of the Now here is another thing I would difficulties from your standpoint. like to have your help on. It was Leave us out of this if you want to, raised by one of the gentlemen who but certainly indicate some of the asked questions before. It would help things you have to do because, as it tremendously if we could, throughout stands today, the home owner that this organization at least, and reads many of tt:hese national articles throughout institutional lenders adopt believes it is a very simple thing- it some standard form of wordage. To is very inexpensive, etc., etc. me I think the term "futt:ure advance" Now that isn't true, and I think the corresponds really to a building loan [16] mortgage. In other words, something standpoint of the lender. If we should indicating construction is going to have made many years ago a lot of take place. The term "open end" open-end mortgages on those houses should be split down into what I then today on a transfer of title, at would call a true open-end mortgage. today's price and pursuant to our That is, a mortgage that is absolutely apparaisal today we can build for unlimited as to amount. two-thirds of the appraised value to Then we have in Massachusetts day. Possibly not as high as the something which is called a flexible selling price for certainly two-thirds mortgage. That is, it is limited to would buy you our appraisal we put the original principal. on it. The whole transaction could be And then the third element that handled if we had the original bor might come in here is for what pur rower still in the house and then sell pose shall the funds be used. In other our mortgage by a simple note. In words it seems to me that if funds other words, we could cut down the are limited to use like under Mas cost of this transfer. We could loan sachusetts statute you really have the money to the man who is selling a conservative loan. The reference the property. And I hope somebody form provides in New York that will discuss here this morning that advances may be made for the main problem I just touched on. That is tenance, improvement or repair to this matter of who is to receive the the property, for the payment of advance. taxes, assessments, etc. In other I don't know whether Mr. Pearce words, it is definitely limited to mat Matthews is here but he wrote me a ters which would not impair really fine letter on this subject. He pointed the security of a first lien encum out that in Georgia, for example, brance. That is where it has merit. whenever they sign an open-end mort On the other hand from the stand gage they are immediately dissatisfied point of the institution of lenders, I - nobody wants any part of it be want to offer you this. Going back cause of this danger where the prop roughly a generation after the first erty has been transferred, etc. world war, in the Western part of California, with respect to where Long Island laying within the limits of New York City there were anum advances have been made after the ber of two-family homes built, and I property has been transferred, is ex think the sales price per unit might actly the opposite as I understand it. Mel Ogden wrote that where it has run, we will say $3,500 per unit or, separately, $7,000 for the two-family been transferred and the one that makes the advance to who he thinks house. is the owner and · turns out not to be Now those houses were built as you appreciate roughly 32 or 33 years ago. the owner, that is an unsecured loan. many of these houses were and are still occupied by men who work, men Questions who have some manual dexterity. Now if I am not taking too much Over the years those houses had to be time of the group I am prepared to protected by composition shingles on answer questions to my capacity. the roof. Many put shingles on the side to protect against the weather. MR. JORDAN: You spoke of Furnaces have been replaced by new searches. Aren't two searches really furnaces, etc. Today the houses are necessary, one before you make the really livable. Other communities advance and the other after you made have been built up around them; the the advance, breaking it all down. assessments that were originally MR. SWEZEY: I would assume, made for sewers and other purposes Buck, that in that situation the cor have been paid in full. I can say the respondent, at least for our company, selling prices of those houses is would notify you at the time of mak around fifteen hundred dollars. ing the advance, and that you would Now here is where the true open want your searches at that time. end mortgage comes in from the MR. JORDAN: It would be co-ordin- [17] ating down to the 1time you make see if there are any mechanics lien of your advance. record at the time you make the ad vance. It would be something like MR. SWEZEY: Yes. I would like this for example: just a minute more and tell you about The way it used to be with the Title a discussion I had with Mel Ogden Guarantee and Trust Company if I the other day about construction was to make an advance this after mortgages. And he asked how we did noon at 2 o'clock, yesterday I would it in New York. Now this may be no have notified THE GROWTH OF LIFE INSURANCE COMPANY MORTGAGE INVEST MENTS IN RECENT YEARS The following pages present some past. Commercial and industrial con salient facts with regard to mortgage struction attained record levels also. investments of the nation's life insur In addition, farmers spent more mon ance companies, and MORTGAGES HElD BY U S liFE COMPANIES AS PERCENT OF MORTGAGE DEBT IN U S BY TYPE OF PROPERTY 1-4 FAMKY MUlllfAMKY RUIDIHTIAI 00 FAIIII RUIDINTIAl AND CD lllllllROAl 2 4 6 I 1946 1947 1941 1949 19SO 19S1 1952 19SJ 1946 1947 1948 1949 l'ISO 19S1 19SI 19SJ 1946 1947 1941 1949 19SO 19S1 19S2 19SI [19] MORTGAGE DEBT OUTSTANDING IN THE UNITED STATES C000,000 Omitted l Multifamily 1-4 Family Residential and Farm Residential Commercial Total Year Amount % of Total Amount % of Total Amount % of Total Amount % of Total ~ 1946 ...... $4,897 11.7 $23,059 55.2 $13,802 33.1 $41,758 100.0 ...... 0 1947 ...... 5,064 I 0.3 28,161 57.6 15,692 32.1 48,917 100.0 1948 ...... 5,288 9.4 33,261 59.2 17.647 41.4 56,196 100.0 1949 ...... · ... 5,579 8.9 37,496 59.8 19,581 31.3 62,656 100.0 1950 ...... 6,071 8.3 45,072 62.0 21,621 29.7 72,764 100.0 1951 ...... 6,588 8.0 51,872 63.2 23,683 28.8 82,143 100.0 1952 ...... 7,140 7.9 58,155 64.0 25,585 28.1 90,880 100.0 1953 ...... 7,700 7.6 65,000 64.7 27,800 27.7 I 00,500 100.0 Sources: Compiled from various sources, as reported in the Federal Reserve Bulletin and the Survey of Cur rent Business. The 1952 and 1953 figures are subject to revision. MORTGAGES HELD BY u. s. LIFE INSURANCE COMPANIES ( 000,000 Omitted ) Multifamily 1-4 Family Residential and Farm Residential Commercial Total Year Amount % of Total Amount % of Total Amount % of Total Amount % of Total 53.0 $ 7,155 100.0 ....., 1946 ...... $ 795 I 1.1 $ 2,570 35.9 $3,790 rl C'l 1947 ...... 895 I 0.3 3,459 39.9 4,321 49.8 8,675 100.0 ...... 1948 ...... 990 9.1 4,925 45.5 4,918 45.4 I 0,833 100.0 1949 ...... I, 138 8.8 5,970 46.3 5,798 44.9 12,906 100.0 1950 ...... I ,327 8.3 8,392 52.1 6,383 39.6 16,102 100.0 1951 ...... 1,527 7.9 10,814 56.0 6,973 36.1 19,314 100.0 1952 ...... I ,705 8.0 II ,800 55.5 7,746 36.5 21,251 100.0 1953 ...... r,872 8.0 12,935 55.6 8,468 36.4 23,275 100.0 Sources: Institute of Life Insurance, Home Loan Bank Board, Federal Reserve Board, U. S. Department of Commerce. The figures include small amounts of mortgages held by U. S. life insurance com panies on properties outside the continental United States; such holdings at the end of 1952 were 262,000,000. The 1952 and 1953 figures are subject to revision. MORTGAGES ACQUIRED AND HELD BY u. s. LIFE INSURANCE COMPANIES ( 000,000 Omitted) ACQUIRED IN YEAR HELD END OF YEAR FARM I NON-FARM --, TOTAL FARM I NON-FARM --, TOTAL Conven- Conven- YEAR F.H.A. V.A. tiona I F.H.A. V.A. tional t;3 1946 $178 $ 134 $ 257 $1,092 $1,661 $ 795 $1,228 $ 256 $ 4,876 $. 7,155 ~ 1947 266 451 600 1,469 2,786 895 1,398 844 5,538 8,675 1948 293 1,202 366 1,546 3,407 990 2,381 1,106 6,356 I 0,833 1949 309 1,358 130 1,643 3,440 I, 138 3,454 1,224 7,090 12,906 1950 362 1,486 938 2,108 4,894 1,327 4,573 2,026 8,176 16,102 1951 411 1,058 1,294 2,371 5,134 1,527 5,257 3,131 9,399 19,314 1952 372 864 429 2,313 3,978 1,705 5,681 3,347 10,518 21,251 1953 417 819 457 2,642 4,335 1,872 6,015 3,563 11,825 23,275 Sources: Institute of life insurance and Spectator Year Book. The 1952 acquisitions and the 1953 acquisitions and holdings are subject to revision. PERCENTAGE OF ASSETS INVESTED IN MORTGAGES U.S. Life Insurance Companies YEAR FARM I !NON-FARM---, TOTAL F.H.A. V.A. Conventional 1946 1.6 '1. 2.6 '1. .5 '1. I 0.1 '1. 14.8 '1. 1947 1.7 2.7 1.7 10.7 16.8 1948 1.8 4.3 2.0 11.4 19.5 1949 1.9 5.8 2.0 II .9 21.6 1950 2.1 7.1 3.1 12.8 25.1 1951 2.2 7.7 4.6 13.8 28.3 1952 2.3 7.8 4.6 14.3 29.0 1953 2.4 7.7 4.6 15.1 29.8 Sources: Instirute of Life Insurance and Spectator Year Book. The 1953 figures are subject to revision. MORTGAGES HELD BY U I LIFE COMPANIES AI PERCENT Of MORTGAGE DEBT IN U.l 25Pll(llfl------ ~ ------~~~~ percent of the country's total mort ested in a sound national policy with gage dept, a proportion which has respect to housing and mortgage lend grown with only minor interruptions ing. They are likewise vitally con over the last two decades. In 1929, cerned about improvement in stand the life companies held less than 16 ards of health and well-being of the percent of the total mortgage dept. American people, in which good hous ing plays such a part. Sound National Policy Vital The life insurance companies are In view of this historical back aware of the fact that a thriving ground and their present position as residential construction industry, with one of the nation's major sources of its ramifications and impacts in so lendable funds, the life insurance many areas of the economy, is a big companies are naturally deeply inter- factol' in making for high level em- [23] ployment and continued economic are so healthy in a free market econ growth . .Aft the same time, however, omy. the life insurance companies have an Government cooperation with the equal interest in seeing that the pro private sector of economy to maintain duction of housing is related to de a high level of construction activity mand,, since the consequences of over has proved both important and de production to the people and to the sirable in the past. The life insurance nation at large are all rtoo clear in companies regard it as appropriate the record. for the Federal Government through Now that shortages and urgent general credit policy, through policy needs have been met, in housing as with respect to the Government-in in other areas of the economy, the sured and guaranteed mortgage pro law of supply and demand and the gram, and in other similar ways, to principle of the free market should aid in lending stability to the private be restored to their proper function home building industry. our economy_ As in rthe workings of The Influence of Market Forces related to housing, this means that the number of starts each year should A program based on such policies bear a relationship to such basic should aim to help level off the peaks forces as the rate of family forma and valleys of home building, while tion, the need for replacement of permitting both building and mort clearly substandard housing, and the gage 'terms to be responsive to mar willingness to buy_ Wha'tever the gen ket forces. There is sound reason, eral objective of stability, there must however, for avoiding such extremes be a leeway for the inevitable price as using housing as a pump-priming and production adjustments which mechanism for the entire economy, OMISSIONS!!! YOUR WORRIES VANISH WITH OUR ABSTRACTERS' LIABILITY INSURANCE b ~rotect ~ourself from financial Joss imposed y aw a!:l"amst you for damages because ~fa neghgent act, ~rror or omission committed Y _you, your ~ssoc1ate or employees wt~lle perform~ng professional services for o ers. For thJs necessary protection call your Saint Paul Agent .. . t o d ay [24] or providing special assistance in this any other securities, certain clearly area in the form of direct Govern defined responsibilities and objectives ment lending or undue and unsound underlie the pattern of life insurance liberalization of mortgage terms. The inves1tment practices. The companies facts in the case show, for example, are deeply conscious of the position that the lengthening of mor [25] COMING EVENTS Date Meeting Where to Be Held June 24-25-26 Colorado Title Association Conven Glenwood Springs, Colo. tion Hotel Colorado June 24-25-26 Michigan Title Association Conven Traverse City, Mich. tion Park Hotel Sept. 8-9-10-11 American Title Association National Chicago, Illinois Convention Edgewater Beach Hotel Sept. 17-18 North Dakota Title Association Con- Williston, No. Dakota vention Oct. 3-4 Kansas Title Association Convention Hutchinson, Kansas Baker Hotel Oct. 4-5 New York State Title Assn. Conven- Lake Placid, New York tion Oct. 7-8-9 Nebraska Title Association Conven- Fairbury, Neb. tion Mary-Etta Hotel Oct. 7-8-9 Oregon and Washington Land Title Tacoma, Washington Associations- Joint Convention Winthrop Hotel Oct. 10-11-12 Missouri Title Association Conven- Jefferson City, Missouri tion Hotel Missouri Oct. 21-22-23 Wisconsin Title Association Delevan, Wisconsin Convention Lake Lawn Lodge [26] CODE OF ETHICS The American Tide Association The foundation of the American SECOND heritage of personal Freedom is the widely allocated ownership and use Every member shall obtain and of the land. Upon the furtherance of justifiably hold a reputation for hon that heritage, depends the survival esty and integrity, always standing and growth of free institutions and sponsor for his work intellectually of our civilization. The Land Title and financially. Profession is the instrumentality through which titles to land reach THIRD their highest accuracy and attain the Ever striving to serve the owners widest distribution. of interests in real estate, members The Title Profession having be shall endeavor (a) to facilitate trans come such a vital and integral part fers of title by elimination of delays of our country's economy, there are and unnecessary exceptions and (b) imposed on each member of the to make their services available in a American Title Association obliga manner which will encourage trans tions above and beyond those cus ferability of title, provide adequately tomarily required of participants in for obligations which they assume in ordinary commercial pursuits and a connection therewith and afford a code of ethics higher and purer than fair return on the value of services ordinarily considered acceptable in rendered and capital employed. the market-place, to the fulfillment of which the Title Profession is dedi FOURTH cated. Each member of the American Members shall support legislation Title Association shall be ever zeal throughout the country which is in ous to maintain and improve the the public interest and will unburden quality of service in his chosen call real estate from unnecessary restric personal re ing, and shall assume tions and restraints on alienation. sponsibility for maintaining the high est possible standards of business practices, and to those purposes shall FIFTH pledge observance and furtherance of Members shall not engage in any the letter and spirit of the following practices detrimental to the public Code of Ethics. interest or to the continuing stability of the Title Profession. FIRST Governed by the laws, customs and SIXTH usages of the respective communities Members shall support the organi they serve, and with the realization zation and development of affiliated that ready transferability results state title associations founded and from accuracy and perfection of maintained upon the Principles set titles, members shall issue abstracts forth in this Code of Ethics. of title or policies of title insurance only after a complete and thorough SEVENTH investigation, founded on adequate r e c o r d s and learned examination Any matter of an alleged violation thereof, and shall otherwise so con of the principles set forth in this Code duct their business that the needs of of Ethics may be submitted to the their customers shall be of para Grievance Committee of the Ameri mount importance. can Title Association. [21] Note for Your Calendar . . . AMERICAN TITLE ASSOCIATION 48th ANNUAL CONVENTION Septennber 8, 9, 10, 11 EDGEWATER BEACH HOTEL CHICAGO. ILLINOIS [28]