‘No black market’

Press, 10 November 1983, Page 1

‘No black market’

PA Auckland The Prime Minister, Mr Muldoon, dismissed claims yesterday that a black market would develop in mortgages. Speaking in Auckland, he discounted Opposition predictions of such a trend. “The borrower is a bit of a fool if he pays above the legal rate,” he said. Mr Muldoon also rejected the idea that some lending institutions might circumvent the limit on mortgage interest by issuing (uncon-

trolled) personal loans instead. “Any financial institution which does that is crazy,” he said. “What a bloke can do is sell his house and skip to Australia — and where’s your money? If you advance money without security you are out of your mind.” Mr Muldoon said he expected chaos “for a while,” and wild claims from those who did not bring their borrowing rate's down in time. 7 / He said most existing

mortgages with higher interest rates than the new level would soon come up for review through clauses included in mortgages issued when, interest rates were rising. The review would be in borrowers’ favour. However; lenders which had not included review clauses would be lucky and would not have to bring down their rates. “Those are the kind of lenders who. did not want to put their rates up,”, he said.