Question 266.— What general rule should be adopted by a banker in estimating a customer's financial position, where the assets of such customer consist of encumbered real estate, taking into consideration the possibility of a claim for dower against such lands? To what extent would the security of a loan to such a customer be affected by his marrying subsequently to the making of the loan?

Answer.—The only general rule we can suggest is that it should be assumed that in the event of the bank wishing to come against the property, it would sell for much less than the valuation put upon it; that the encumbrances would be increased by interest, taxes, insurance premiums, etc.; and that against any surplus then remaining, there would be chargeable the dower interest, which might exhaust the whole surplus. What this may amount to in money may be estimated by taking the present value, calculated according to the usual tables, of a life annuity equal to one-third of the estimated income derivable from the full value of the property.

Upon marriage the property becomes charged with the dower interest subject only to existing mortgages.