In New York City, a majority of property owners regard a mortgage on their property as a necessary evil. They prefer to own three pieces of real estate, each with a substantial mortgage thereon, to owning one piece of property free and clear. This view may be much influenced by the fact that where property is owned as an investment a larger return can be obtained on the equity if mortgaged for, say, two-thirds of its value at a comparatively low interest rate.

To obtain a mortgage, one must know where to go to borrow. The title companies, the savings banks, insurance companies, and a multitude of estates and individuals, represented by attorneys or agents, are constantly looking for investments, and to these the borrower applies. In a majority of cases the borrower desires as much mortgage on his property as he can obtain, consistent with the interest rate he desires to pay. A very liberal loan is often obtainable if a high interest rate is offered, but a borrower often is willing to accept a small and ultra-conservative loan, in consideration of a minimum interest charge. A borrower must be able to present his application for a loan in a favorable light, and to discuss intelligently the value of his property. It is, however, a common belief that a borrower can rarely serve his own interests as well in applying directly for a loan to a principal, as by employing a professional mortgage broker.

The reasons for this are obvious. It is the business of the broker to know those who are lending money; to be posted as to interest rates; to know the preference each lender has for a particular type of property or a particular location.

The broker's professional acquaintance provides him with the entree to many lenders where the stranger would find difficulty of access and a less attentive ear. The broker's opportunity to keep posted as to values, makes his advocacy of the desirability of some particular loan carry weight that an inexperienced borrower would fail to impart.

The broker can, moreover, parry the often embarrassing questions of the lender by the truthful statement of "not knowing." The owner, who, must needs either prevaricate or state the fact if asked as to the condition of his property, the actual income and vacancies, and also what the property cost, this last data being all too often a guide for the investor in fixing value, may lose the desired loan while the lender misses a really good investment.

The mortgage broker is likewise of much assistance to the lender in helping to find him a good investment, and is a large factor in the mortgage investment business as it exists in this city.