16 BULLETI]Sr 968, U. S. DEPAliTMElvrT OE AGRICULTURE. 



It also appears that, in general, the period of repaj^ment tends to 

 be longer in the case of second mortgages which represent a com- 

 paratively large proportion of the purchase price. For 527 records 

 of second mortgages made in connection with the purchase of farms 

 and with the giving of a first mortgage to the Federal land banks, 

 it was possible to determine the relationship between the period of 

 repayment and the size of the second mortgage. Figure 4 shows in 

 detail how many of all these mortgages were fully payable by the 

 end of various terms, the records being grouped according to the 

 relative size of the second mortgage. 



Approximately three-fifths of those second mortgages which 

 amounted to over half of the cost of the purchased farm were not 

 fully payable until after the fifth 3^ear, and approximately one-fourth 

 of those amounting to between two-fifths and half of the cost of the 

 purchased farm were not fully payable until after the fifth year. 

 On the other hand, approximately three-fourths of the second mort- 

 gages amounting to one-fifth or less of the purchase price were 

 fully payable by the end of the fourth year, and over nine-tenths 

 of them were fully payable by the end of the fifth year. 



PROVISIONS FOR PERIODIC REPAYMENT OF SECOND MORTGAGES. 



As in the case of Federal farm loans, provision for periodic repay- 

 ment of the second mortgage loan is likely to be an important aid to 

 the landless man possessing little cax^ital. Table VIII shows the 

 percentages of second mortgages repayable in various ways. Half 

 of the second mortgages are payable at the end of the mortgage 

 period without any provision for periodic payments to reduce the 

 amount of the principal aside from instances where it was under- 

 stood that the borrower had the privilege of paying off the second 

 mortgage as he chose, usually at the interest paying date and in 

 multiples of 50 or 100 dollars. Mortgages coming due as a lump 

 sum at the end of the mortgage period occur with especial frequency 

 in the group of 144 buyers who did not borrow on second mortgages 

 from the man from whom they purchased the land; seven of every 

 ten of these men have mortgages repayable in that manner. About 

 two out of five borrowers were under obligation to make annual 

 payments on their second mortgages. Borrowers who were in- 

 debted on second mortgage security to relatives were particularly 

 favored as to the final payment of their second mortgages, a third 

 of these borrowers being permitted to make full payment practically 

 at their own option. Few cases of second mortgages repayable in 

 monthly or semiannual payments were found. 



