Outlines Features in Proposed Trust Deed Reform

Outlining the features in the proposed reform in trust deeds which will appear as an initiative measure on the ballot at the election in November, Leslie H. Kranz, Los Angeles, member of the executive committee, Citizens' Trust Deed Reform League, has addressed a letter to Harry A. Lake, president of the California Retail Lumbermen's Association, and also requested an opportunity to address an Assiciation meeting to discuss the movement.

In his letter, Mr. Kranz says:

"It is the belief of our committee that banks and legitimate mortgage companies will be definitely benefited by the reform in the long run.

"Thirty-five states get along nicely without such a thing as a trust deed with a sale clause but without an equity of redemotion. Even in California while the trust deed has existed for many years, its general use as a substitute for a mortgage is a development of very recent years. Formerly it was used only as a junior encumbrance. Its recent lvidespread use has been forced by a certain type of mortgage companies and their bank affiliates. The trust deed has been characterized by our California supreme court as a 'freak and anomaly in our law.'It can only be abolished by legislation.

"The two outstanding features of the proposed reform are :

"1. Abolition of the 'sale clause' in deeds of trust, thereby compelling them to be foreclosed through court action.

"2. The creation of an equity of reclemption with a twelve months period of redemption, the same as now exists in the case of a mortgage.

"The effect of these two changes is to eliminate all distinctions (except as to form) between a mortgage and a trust deed.

"The proposed reform will benefit lumber dealers and all others engaged in thc building business, in the following respects:

"1. The fake trust deed filed for record solely for the fraudulent purpose of wiping out mechanics' liens will become an impossibility. Since all encumbrances on real property will have to be foreclosed in court, and will be subject to the scrutiny of the court, and since the burden of proof as to consideration will be on the holder (as it now is with a mortgage), the present abuse of the trust deed by'rvhich mechanics' liens are wiped out to the extent of hundreds of thousands of dollars every year, will come to an end. At present, even where a lumber dealer is reasonablv certain that a trust deed ahead of his lien is r,t'ithout consideration, or that it has been placed of record with fraudulent intent, his only remedy is to seek an injunction. He must carry the burden of proof and before the injunction is granted he must put up a bond. This is not always possible to obtain.

"2. By creating an equity o{ redemption in the case of trust deeds the lumber clealer holding a mechanics' lien will have the right to redemption for twelve months after foreclosure, same as he now has in the case of mortgage foreclosure, instead of as now happens, having the trust deed foreclosure wipe out his mechanics' lien instantly and completely, sometimes ever.r n'ithout notice. The owner himself, likewise having a right to redeem, will in many cases, save his property and pay off the mechanics' liens. The junior encumbrances rvill likewise have the right to redeem.

"Among the advantages of the proposed reform to the general public are the f.ollowing: u3. The cost of foreclosure, being subject to the approval of the court, will, after the proposed reform, be less than the arbitrary schedule of fees now being charged by the title companies. The fees now being charged by attorneys at law for mortgage foreclosures are on the average, actually much less than the fees being charged by the title companies for trust deed foreclosures."

"I. Millions of dollars worth of homes are taken arvay from home owners each year through the foreclosure of trust deeds. This is often without notice to the owner or junior encumbrancers, and neither the owner nor junior encumbrancers have any equity of redemption or right to redeem. A mere temporary misfortune or illness may, and often does deprive a home owner of his home. If the proposed reform is enacted into legislation, foreclosure can only take place after notice and after giving the owner his day in court. By re-establishing the right of redemption, thousands of homes will be saved each year, thereby stabilizing general prosperity.

"2. A present vicious and unjustifiable practice that is altogether too common in the case of trust deed foreclosure, is for the holder or beneficiary, to bid a very low amount at the sale, and then take a deficiency judgment against the maker of the trust deed note (usually the owner) for the balance, thereby making it almost impossible for the owner to get on his financial feet again. He loses his home and then has to pay a large portion of the debt in addition. This crying abuse is possible only because there is no equity of redemption. With the re-establishment of the right to redeem, the one foreclosure will have to bid the fair and reasonable value of the property because the right to redeem will be at the price determined by the bid.

33rd Annual Meeting

The 33rd annual round-table meeting of the National Association of Wooden Box Manufacturers will be held at the Congress Hotel, Chicago, on April 14 and 15, 1932.

Subjects of vital interest to the wooden box, crate and lumber industries will be discussed and everyone interested in the welfare of these industries is invited to attend the meeting on the first day, which will open at 10 a.m., April 14. The meeting on April 15 will be open to members of the association only.

lssue Blue Print on Band Resaws

Some of the reasons why band resaws crack and a practical way by which filers having trouble with resaws cracking can largely prevent this difficulty is clearly and brieflJ' covered in Blue Print No. B-zC06, published by Simonds Saw and Steel Company, of Fitchburg, Mass. A copy of the blue print will be sent free to any filer writing for it. The information on the blue orint is the work of Elmer E. Davis, well known band salr,' expert, and is the result of his years of experience handling problems of this nature.

Ed. Seward Receives Many. Congratulations

Ed. Seward, Dolbeer-Carson Lumber Co., Los Angeles, is gaining nation-wide prominence as a "hole-in-one" golfer. In our issue of February 1 we published an article stating that he now has the distinction of being the "hole-inone" golf champion of the Hollywood (Calif.) Country Club, and for the third time performed this feat on the Hollywood course on January 2, 1932. As a result of this article, he'says that he has got a big "kick" out of the many communications that have reached him from various sections of the country. Below we are quoting a letter he received from R. N. McArthur, of The lJpson Company, Lockport, N. Y., which.pleased him very much.

"I was just reading THE CA'LIFORNIA LUMBER MERCHANT and came across the interesting write-up about the 'hole-in-one' you made for the third time.

"Being an enthusiastic golfer, I naturally was interested and certainly read it over longingly.

Itt^t certainly is a mighty fine record, Mr. Seward, and as for me, I'm still shooting at my first one.

"Please accept my hearty congratulations and sincere good wishes."

Wooden Box Mfgrs. Meeting

(Continued from Page 25)

Saae, Safe and Sure

Buy a $1,000.00 bond issued by a company with Assets over f,588,000,000.

You may pay (if age 23) only $48.91 annually for 20 yearc.

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If death occurs any time after contract is signed bond will matute and be paid in Cash to your heirs. Bonds issued in any amount desired.

(The Clearing Hourc\

This Column of "Wants" and "Don't Wants" is fon

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The Fellow Who Wanti to Sell

The Fellow Who Wants to Hire

Rate: t2.s0 per eolumn inch The Fellow Who Wants to Be Hired

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Connection By Shingle Expert

Shingle expert and lumberman with years of exDerience. Familiar with wholesale and retail, deiails of mili, selling or in office. Address Box C-243, The California Lumbe"r Merchant.

POSITION WANTED BY EXPERIENCED OFFICE MAN

- Experienced lumber office man, stenographer and bookkeeper, several years experience with wholesale lumber firms. Capable. reliable, references furnished. Address California Lumber Merchant, Box C-430.

POSITION WANTED BY EXPERIENCED MAN

Experienced planing mill manager wants position. Four!9gg y.".s' experience. Expert estimator and cletailer. Thirty-four years old, marriid. Best of references. Address Box C-435, California Lumber Merchant.

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ATTENTION, LUMBERMEN !

The office of the California Lumber Merchant is constantly receivingapplicatione, from both men and women, desiring work with lumber concerns. Most of t{rese have had previous lumber experience.

When you are in need of help of any kind, either office or yard, why not get the habit of calling uE first and gtritrg uE an opportunityto be of service to you as well as to those needing employment? There is no charge with t*risseryice, to employer or employee.

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