Mortgage money hardest to find in Chch—M.P.

Press, 7 May 1984, Page 5

Mortgage money hardest to find in Chch—M.P.

Christchurch homeowners are finding it harder to refinance their mortgages than those in other centres, according to Labour’s housing spokesman, Mr P. B. Goff.

He said that unless big alterations to the interest rates regulations were

made “a dramatic increase in mortgagee sales was likely over the next year.” Surveys had shown that an emergency was developing and that home loans were “virtually impossible to refinance in some areas,” he said. Christchurch was the worst hit? Mr Goff said that a couple with young children had come to him recently after trying desperately to raise a further $4OOO to refinance their mortgage. Approaches made by their lawyer to finance companies and other solicitors had failed.

The family was now “in imminent danger of losing its home” and while the amount of money needed was small, the personal and social costs would be great. They were not the only ones in this predicament, he said, but were “part of a growing wave of cases referred to members of Parliament.”

The Prime Minister, Sir Robert Muldoon, had imposed the interest rate controls for “political reasons,”

Mr Goff said. But their impact had been “totally counterproductive for many homeowners.”

Not only had traditional refinancing sources—finance companies and solicitors’ funds—all but dried up, but those with, existing mortgages were being charged the same high interest rates they were paying before the regulations were introduced. Mr Goff said that examples had been referred to Sir Robert of people with mortgages at 19, 20 and 21 per cent. Their rates had not been reviewed because the lenders concerned could not or would not lower them to 11 per cent. Effectively, the Government had given them the excuse not to drop their rates at all, whereas without the regulations, they might have been reduced 5. or 6 per cent, Mr Goff said. The review of the regulations “should confront the question of the availability of mortgage finance and those with existing mortgages trapped on high interest rates,” he said.