BMB

The following extracts, relating to the House Purchase Department, have been extracted from the Bank
Committee Reports to the City Council as indicated:

Tuesday, May 30th 1922: Advances to Depositors for House Purchase

During the year advances have been made to 300 depositors for the purchase of their houses, bringing
the total number of borrowers from the Bank up to 1,264. In 142 cases the borrowers have discharged
their indebtedness to the Bank, leaving the number of mortgagors at the 31st March, 1922, at 1,122.

The sum advanced during the year in respect of House Purchase was г85,365, bringing the total amount
of the advances made since the opening of the Bank to г349,453, and the amount repayable at the end of
the year to г261,619 1s. 4d.

As illustrative of the character of the assistance which the House Purchase Department of the Bank has
rendered to the depositors, the following information is submitted:

No. of cases where the advance:
- did not exceed г100 ЕЕ.Е..Е.. 64
- г100 to г200 ЕЕЕЕЕ.ЕЕ. 487
- г200 to г300 ЕЕЕЕ.ЕЕ.Е 314
- г300 to г400 ЕЕЕЕЕЕЕ.. 204
- г400 to г500 ЕЕЕЕЕЕЕЕ 81
- г500 to г750 ЕЕЕ..ЕЕЕЕ 104
- г750 to г1,000 ЕЕЕЕ...ЕЕЕ 9
- over г1,000 ЕЕЕЕЕЕЕЕЕ 1
Giving an average advance of г276.

It has been necessary to exercise the Bank's power to obtain possession of property in two cases. In one
case the property has been sold by auction and the full amount of the mortgage recovered, while in the
other a Receiver has been appointed and the rents are being collected.

The repayment of principal and interest by the borrowers is satisfactory, although it was found necessary
to suspend or modify the repayments in a few cases where the circumstances existing justified such
action.

Tuesday, June 3rd 1924: Mortgages

The advantages which the Bank provides for depositors to buy their houses are appreciated, and during
the past year 925 applications have been dealt with. Of these applications 765 were granted, and
mortgages representing г189,147 were arranged.

Since the Bank opened in 1919 no less a sum than г633,395 has been advanced on mortgage to 2,130
depositors to enable them to purchase houses for their occupation; 472 of these borrowers have entirely
paid off their mortgages.

At the end of the year 1,658 mortgages were in operation, representing an indebtedness of г401,970 14s.
11d., or an average of г242 8s. 10d. per borrower.

The following is an analysis of the outstanding loans:

No. of cases where the indebtedness:
- does not exceed г100 ЕЕ.Е..Е.. 225
- г100 to г200 ЕЕЕЕЕЕ.ЕЕ. 532
- г200 to г300 ЕЕЕЕЕЕ.Е.Е 477
- г300 to г400 ЕЕЕЕЕЕЕЕ.. 203
- г400 to г500 ЕЕЕЕЕ..ЕЕЕ 126
- г500 to г1,000 ЕЕЕЕ.....ЕЕЕ 95
- Total ЕЕЕЕЕЕЕЕ...ЕЕ 1,658

The year has been marked by the purchase of Corporation houses through the Bank, 154 such purchases
having been completed, and arrangements made for buying in 150 additional cases as the houses are
completed and ready for habitation. The policy sanctioned by the Council of assisting people to acquire
Corporation houses by grants of a higher figure than the Bank are able under their Rules to make has
been brought into operation by the Finance Committee, the machinery of the Bank being used for the
purpose.

Your Committee are pleased to report that in very few cases has it been necessary to take drastic
measures against borrowers in arrear with repayments. Cases of hardship have been brought to the
Committee's attention, and have been dealt with sympathetically by them.

During the year under review, the Committee felt it necessary to take possession in four cases, and
appoint a Receiver in respect of the properties. Two of these were subsequently disposed of, and the
outstanding balance due to the Bank recovered. At the end of March, 1923, a Receiver was acting in four
cases, one of which has, during the past year, been satisfactorily dealt with. Consequently five cases
were, at the end of March, 1924, in the Receiver's hands.

Tuesday, June 12th 1928: Loans on Municipal houses

The following figures relate to loans made on Municipal houses:

As the Council are aware, the Bank's liability in respect of loans on municipal houses only extends to 80
per cent. of the valuation obtained by the Bank, the Finance Committee guaranteeing the excess amount
loaned under the low deposit scheme sanctioned by the Council. The extent of the Finance Committee's
guarantee at the end of the financial year amounted to г152,887.

The monthly repayments under the terms of the mortgages have been maintained, on the whole, at a
satisfactory level, although some difficulty was experienced during the year in respect of mortgages of
municipal houses on the Pype Hayes Estate. As a result of the action taken by the Lord Mayor, and with
the hearty co-operation of other Committees interested, this difficulty has been eased, and your
Committee believe that the arrangements made with the individual mortgagors will result in giving general
satisfaction. Cases of hardship arising from unemployment or serious illness have been dealt with
sympathetically, and your Committee have permitted modified repayments to be made where the
circumstances justified such a course. On the other hand, a few mortgagors have shown an inclination to
ignore their obligations, and these have been dealt with in a firm manner. In cases where the Committee
felt it necessary to take extreme measures, the whole of the amounts due have been recovered.

The practice instituted some years ago of converting progressive mortgages into Bank mortgages has
been continued during the year. These applications are approved by the Public Works and Town
Planning Committee, and progressive advances made by the Finance Committee. The repayment of the
advance is dealt with by the Bank, acting as agent for the Finance Committee. During the year 18
progressive mortgages were discharged and Bank mortgages created, and at the end of the financial year
10 progressive mortgages were being dealt with by the Bank.

Tuesday, June 4th 1929: Pype Hayes Estate

The difficulty in connection with certain houses on the Pype Hayes Estate, to which reference was made
in the last annual report, has been overcome; the mortgagors being dealt with in accordance with the
directions of the City Council.

Tuesday, June 3rd 1930: Loans on Municipal houses, etc

The liability of the Bank in respect of loans on municipal houses extends to 80 per cent. of the valuation,
the balance of the loan being found by the Bank on the guarantee of the Finance Committee in
accordance with the scheme for sale of houses adopted by the Council. The extent of the liability of the
Finance Committee at the end of the financial year amounted to г160,051, but up to the present in no
case has it been necessary to take advantage of the guarantee.

The monthly repayments under the scheme of the mortgages have again been maintained at a satisfactory
level, and only in a few cases has it been necessary to take firm measures in order to recover the amounts
due.

The number of advances on municipal houses is restricted by the percentages of houses for sale fixed by
the Council, viz., 33.33 per cent. in the case of parlour type and 10 per cent. in the case of non-parlour
type, although your Committee are in a position to meet additional applications.

During the year 8 Progressive Mortgages arranged by the Public Works and Town Planning Committee
have been converted into Bank Mortgages; and at the end of the year the Bank was acting for the Finance
Committee in the collection of repayments in respect of 30 Progressive Mortgages.

Tuesday, June 5th 1934: New houses on estates, etc

To enable the Bank to deal with applications in respect of new houses on estates in course of
development, where the builder or those responsible are selling houses at fixed purchase prices with fixed
deposits, your Committee have adopted a scheme whereby exceptional advances may be made up to 90
per cent. of the purchase price of the house, and that the builder or person responsible for the sale of
such houses shall deposit satisfactory collateral security to cover the difference between the normal
amount which the Bank would lend based on valuation and the amount of the exceptional advance.

The maximum term of years for which loans may be granted has also been increased from 20 to 25 years.

To meet the circumstances of those who prefer a fixed monthly payment of interest and principal, your
Committee are prepared to make arrangements accordingly, as an alternative to the usual method of
repayment, which is based on a fixed monthly instalment of principal with a reducing monthly interest
charge.

Advances in respect of houses which do not form part of an estate development will continue to be made
on the usual basis, which admits of loans representing up to 90 per cent. of the valuation in approved
cases, and the facility for extended loan period and equated payments will also be applicable thereto.

Applicants desiring to combine house purchase with life or endowment assurance may do so by adopting
one of several schemes which have been arranged in conjunction with leading Assurance Companies.

[Loans on Municipal Houses at March 31st 1934: 4,113 mortgages arranged, г1,340,917 advanced.]

Tuesday, June 4th 1935: House Purchase Department

During the year, 713 mortgages were arranged and 813 paid off, leaving in force 6,432 mortgages
representing an indebtedness of г1,535,305 5s. 9d., or an average of г238 14s. 0d. per borrower.

The repayment transactions totalled 73,768, and in this connection it is gratifying to report again that the
borrowers have satisfactorily maintained their regular payments. In a few instances it has been necessary
for your Committee to exert pressure to obtain the amounts due, and the steps taken have been sufficient
to prevent the Bank suffering any loss.

Borrowers have the choice of making their repayments by two methods, viz.: (1) by a fixed monthly
instalment of principal, with a reducing monthly interest charge based on the amount of principal repaid,
or (2) by a fixed amount representing both principal and interest; and it is interesting to find that, despite
the publicity given to the second method by builders and building societies, only 47 persons have elected
to make their repayments to the Bank by that means. The majority of borrowers appreciate that the first
method referred to above confers advantages which do not accrue to mortgages effected on the equated
payment basis. In addition to the above methods of making repayments, your Committee have made
arrangements whereby house purchase may be combined with Life or Endowment Assurance, and there
is evidence that interest is now being taken in these arrangements.

In February last your Committee came to the conclusion that a reduction in the rate of interest charged
might prudently be made, and accordingly it was decided to reduce the rate from 5% to 4╜% per annum,
a step which proved to be in step with public opinion, and one which has since been followed by other
lending organisations. In reaching such a decision, your Committee did not overlook the claims of
existing borrowers to consideration in this matter, and a scheme was devised whereby an allowance equal
to the reduction of half per cent. could be made at the end of December each year, providing the account
had not been in arrear. This decision has given general satisfaction to the mortgagor, many of whom have
expressed their appreciation of your Committee's actions.

The competition for house purchase business has greatly increased, owing to building societies from all
over the country operating in Birmingham and adjoining districts through agencies, or by establishing a
local office. Many of these societies have arranged schemes with builders and agents for the sale of
houses on low deposit terms. While the Bank, as a public institution, cannot take undue risks, your
Committee have, nevertheless, considered it desirable to get in touch with builders and make known the
terms and conditions under which schemes can be arranged. As a result, many builders are now
co-operating with the Bank.

The Committee will continue to give careful consideration to all applications, whether from builders or
purchasers.

Tuesday, June 8th 1937: Advances Department

During the year your Committee have felt it desirable to revise the terms and conditions under which
advances would normally be made, particularly so far as the same affected builders and others
developing housing estates. The Building Societies Association also found it necessary to prepare a
'Code of Ethics,' to which it was expected societies in general would subscribe. Your Committee have
reason to believe that the majority of building societies have adjusted their arrangements so as to fall in
line with this 'Code of Ethics,' but some societies are taking an independent course. The present terms
and conditions governing advances by the Bank are reasonably comparable with the 'Code of Ethics.'
The difference in the quality of houses being erected is very marked, and it is essential that your
Committee should act with discretion in determining any application. To those who are erecting houses of
a high standard the new terms and conditions have proved acceptable, but there are some cases where, as
a consequence of houses not being up to the same standard, the terms and conditions stipulated do not
make the same appeal.

Tuesday, December 7th 1954: Advances Department

In July last year your Committee agreed to make house purchase advances to approved borrowers to the
same extent as was proposed for building societies under the scheme set forth in the Ministry of Housing
and Local Government Circular 42/54, dated 4th May, 1954, viz.:

90% in the case of houses with a purchase price or valuation of г2,500, whichever is the lower;

95% in the case of post 1918 houses with a purchase price or valuation of г2,000, whichever is the
lower;

at the favourable rate of interest, 4% per annum.

During the seven months under review the amount advanced on mortgages for house purchase and also
for repairs, alterations, and extensions, was г872,188 11s. to 820 depositors, as compared with г582,679
15s. to 615 depositors for the corresponding period in the previous year. A very gratifying increase. It is
hoped now that building licensing has ended the Bank will have still further opportunities of assisting
depositors to purchase houses.

Since the Bank was established in 1919, mortgages totalling г14,659,862 have been granted to 29,631
depositors. The mortgages remaining in force number 7,359 representing an indebtedness of г3,977,735.