Call to pay back Corp, home loans

Press, 24 June 1986, Page 3

Call to pay back Corp, home loans

PA Wellington Housing Corporation mortgage holders with fixed 3 per cent loans are being asked to repay loans to make more money available to new borrowers.

An estimated 26,000 non-renewable loans are outstanding with amounts owing varying from a few hundred dollars to several thousand. The assistant directorgeneral of the corporation, Mr Dan Cattanach, said many of the loans were under the old Rehabilitation Act after World War 11.

He said the outstanding loans averaged between $3OOO and $5OOO. "This would mean a lot more money for us to lend if these loans were repaid now,” he said. “I have already had one call this morning from a man who said he had only about $6OO owing and was going to repay that.”

Mr Cattanach said the campaign to have the loans repaid was part of interest rate reviews of all loans.

In the review, changes in mortgagors’ incomes would mean changes in their interest payments, and he said because of the various types of loans the corporation has made over the years the review

was expected to take about two years. The corporation has more than 200,000 loans outstanding, estimated to total about $2.5 billion.

About 84 per cent of all the loans are at 9 per cent or less interest. The Minister of Housing, Mr Goff, said on Sunday that some people were still enjoying 3 per cent loans which had no review clauses.

“I am saying that if at all possible, they should think about paying their mortgage off to give young families today the same chance as they had when they got their loan many, years ago.” But the Opposition housing spokeman, Mr Roger McClay, said families who still retained low-interest mortgages should not be intimidated by Mr Goff’s “publicity seeking outburst.”

“The low interest rates being paid by these families look exceptional only because of the consistently high interest rate policies of Mr Goff and his colleagues in Government,” Mr McClay said.

“If the Minister wants this money back, he should provide suitable financial incentives just as any other lender would provide if wanting to break a contract.”