THIS "MORTGAGE CORPORATION."

Auckland Star, Volume LXVI, Issue 29, 4 February 1935, Page 6

THIS "MORTGAGE CORPORATION."

Not having been invited to that limited body of people who discussed the above question with Mr. Coates (being only a small citysolicitor with no influence), may I ask some questions regarding the above corporation? I am handicapped by not having seen a copy of the proposed Act, so I can only rely for the details of the scheme upon the precis which has appeared in the Press. Doubtless some scheme may be necessary to cash, the mass of mortgages, for those who need cash, but the question to be decided is whether this creation of the theoretical brain trust is the proper method. Many people imagine (in their hatred) that every mortgagee is a plutocratic Shylock (who should be jumped on), but the reality is that thousands of these mortgagees are small, retired men, or widows, or trustees for children, and these mortgagees have on the average only two or three mortgages. The very wealthy gentleman has too much sense to go in for mortgages, for fear of Parliamentary interference. The object of this scheme is (quite properly) to prevent farmers walking off farms. Well, why not restrict this Act to farms only, and let the present relief commissions deal with them. City mortgagors can now get all they want at 5 per cent. So why should city or private mortgages be included? If the scheme is to cover up the losses on all Government mortgages—well, why include private mortgagees, unless at their request? In my opinion, there is no need to create another expensive Government corporation. The present State Advances Board is skilled in mortgage and finance operations, and it could (under perhaps another name and with enlarged powers) administer all Government mortgages and do the work which this corporation is to do. And the present relief commissions oould (under a magistrate, please!) consider all the claimants for relief, as it- does now very sympathetically. Is it intended to include cash mortgages as well as paper mortgages ? By a paper mortgage I mean a mortgage for the profit obtained on sale of property. It may be right to reduce a paper mortgage, but not a cash mortgage. The latter case is where, say, a widow lends £r>oo cash on a. property sold at, say, £1000. Her investment is fixed with no profit. I have never heard of an owner who, on selling at a profit, offered his mortgagee any share of the profit, so why should the widow mortgagee be required to reduce her £300 mortgage? The mortgagor gambled and lost. Is it intended to release a guarantor if the mortgage be reduced? Many loans were made too high, relying on the personal covenant of the guarantor. Is the "personal covenant" to bo wiped out? This dangerous suggestion was actually made on Wednesday last to Mr. Coates by a barrister at that meeting. Are all mortgages to be included? The banks had sufficient influence to have their on-demand. mortgages excluded from the moratorium; so we may see this Act foisted on to the private mortgagee, who has no one in Parliament to speak" for him. A CITY SOLICITOR.