NEW MORTGAGE REGULATIONS

Press, Volume LXXVI, Issue 23088, 2 August 1940, Page 8

NEW MORTGAGE REGULATIONS

1 Virtual Moratorium During War EXPLANATION BY MINISTER (PBEBS ISftOOIiTtOX TSLeSEAU.) WELLINGTON, August 1. A virtual moratorium is imposed for the duration of the war by the Mortgages Extension Emergency Regulatiohs, 1940, which were gazetted to-day. Protection is afforded in cases outside the Scope of these regulations by the Debtors Emergency Regulations, 1940, also issued to-day. They supersede the Courts Emergency Powers Regulations, gazetted on the outbreak of war, which gave extensive protection to mortgagors and debtors of every description. An explanation of the new regulations wasgiven by the Minister for Justice (the Hon. H. G. R..Mason) in an interview this evening. Mr Mason said the Mortgages Extension Emergency Regulations applied to a mortgage of any property, whether real or personal, or of choses in action, such as a life insurance policy. Agreements for sale and purchase were also protected, a purchaser being treated as a mortgagor. Similarly a lease with a purchasing clause was protected, and if necessary a lease could be extended to protect a lessee's right of purchase. The protection given virtually amounted to a moratorium for the duration of the war. The regulations precluded the calling-up from any mortgagor or guarantor of the principal sum or any part of the principal sum secured by mortgage, or of the exercise of any power of sale or entry into possession, unless the mortgagor had abandoned the property. Similarly actions or proceedings in Court for the principal sum may not he taken without leave of the Court. Penal rates for the recovery of interest may not be enforced without leave of the Court. Where periodical payments were made, which included an instalment of principal and interest, the whole payment was treated for the purposes of the regulations as if it were all interest. The Court may, In its discretion, In an action for interest give judgment for payment at a date to be fixed or for payment by instalments at such time as the Court determined. Where the principal sum exceeded £2OOO, the Supreme Court alone had jurisdiction, but for amounts under that the Magistrate’s Court also had jurisdiction. There was ho appeal from one Court to the other. No Contracting 1 Out There could be no contracting out of the regulations, and the mortgagor’s consent to the performance of any act by a mortgagee which would otherwise require application to the Court Was effectual only if witnessed by a solicitor employed independently of the mortgagee, who certified that consent was given by his advice. “The chief difference between these regulations and the ones they supersede,” said Mr Mason, “is that the new regulations do not in any way require a mortgagor to show that his difficulty is due to war conditions." Referring to the Debtors Emergency Regulations, Mr Mason said they afforded protection in cases outside the scope of the . Mortgages Extension Emergency Regulations. In the superseded regulations, one set of principles was made applicable to all cases; but it was found in practice that two sets of cases really required handling rather differently. In the debtors emergency regulations certain action may not be taken against members of the armed forces or their dependants, except by leave of the Court. In the case of dependants, leave had to be obtained before action may be taken. Other persons may obtain the protection of the Court; hut in their case it was necessary for them expressly to apply to the Court for protection. Protection which may be granted applies to the seizure of goods in hire purchases, writs for the possession, seizure or sale of any property, the issuing of judgment summons, or of attachment orders, the sale or leasing of property under the Rating Act, filing a petition in bankruptcy or a Winding-up petition, the appointment of a receiver, re-entry or determination of a lease, and distraint for rent. The CouVt was given full discretionary powers as to affording protection. Where the property in question was less than £2ot)o, jurisdiction may be exercised by the Magistrate’s Court. The provisions against contracting out, and as to consent by a debtor to the exercise of powers were similar to those in the Mortgages Extension Emergency Regulations.