Mortgagee sales seen as means to pay loans

Press, 4 May 1984, Page 4

Mortgagee sales seen as means to pay loans

Some homeowners may pay for the government’s interest rate controls on property loans with mortgagee sales, according to the convener of the Canterbury District Law Society’s conveyancing sub-committee, Mr D. A. Oldham.

He said yesterday that borrowers at the bottom end of the market were experiencing “quite a considerable amount of difficulty in refinancing their mortgages.” Particularly affected were those people who had not established a good sav-

ings record with an institutional lender and who had bought their houses two or three years ago on a shortterm loan that had now fallen due, he said.

Mr Oldham guessed that they represented between 20 per cent and 25 per cent of solicitors’ home lending. Justice Department records show that 17 applications for mortgage default have been filed this year, which is only slightly higher than for the 14 in the corresponding period in 1983.

These figures may not, however, convey the full impact of the regulations as there is a time lapse of several months between failure to repay and a mortgagee sale. It is a right lenders are reluctant to exercise and use only as a last resort.

The president of the Canterbury and Westland branch of the Real Estate Institute, Mr lan Grant, said that he could see the problem looming but that no-one was really complaining about it yet.