INSURING OF MORTGAGES.

Auckland Star, Volume LXVII, Issue 134, 8 June 1936, Page 6

INSURING OF MORTGAGES.

An interesting example of the uses to which insurance can be put is seen in the Government's mortgage lending proposals. It is the intention of the Government, through the State Advances Corporation, to arrange policies with borrowers on house property to cover amounts owing on mortgage in the event of the breadwinner's death. The best feature of this arrangement is that it gives security of tenure to the wife and family. It also protects the State against loss of capital. To many people a policy of this kind is probably new, but the principle of it has been thoroughly and successfully tested by building societies, particularly in Britain. The Government is, therefore, only extending a practice which has been found to have important advantages for both parties to a •mortgage contract. It is not clear whether the State will require all borrowers to take out such policies. That should not be necessary. Only where the mortgagor has no other adequate protection for his family, or the loan is beyond the recognised safe limit of two-thirds of the value, should there be any compulsion.