Mortgagee and Mortgagor

Dominion, Volume 28, Issue 217, 11 June 1935, Page 11

Mortgagee and Mortgagor

Sir, —I am not a financier, neither am I interested in mortgages on land, but as a farmer I have read with interest many of the letters appearing in "The Dominion” on this question. One thing seems to me -to be clear, and that is that no Government has the right to allow any man to. repudiate a loan where money has been lent to him in good faith. But there is one point that does not appear to have been brought as prominently before your' readers as it might have been, and it is this; .In many instances the capital and interest now claimed by the mortgagee does not represent money actually lent by him, but is a mere paper indebtedness. To give, a concrete example of what I mean: There is a small sheep run well known to me which was bought in 1911 for about ±3 per acre. The purchaser sold this shortly after the war for £7/10/- per acre to ite present occupier, who paid approximately one-third in cash and gave a mortgage for the balance. Aq tke land was never worth, even in the best of times, anything like this sum, the buyer soon found himself in difficulties and has had to seek the protection of the Mortgagors Relief Court, but this body having no power to revalue the property, can only give temporary relief. ’ • , To many of your readers who are tanners it appears that in such cases the court ought to have power to revalue the land. In a case such as this—a by no means unusual one —it the price ot th. land were reduced to its original value or near to it. which is its true one, the mortgagee would not be a penny the pooler, for the value in any case was only *> paper. For instance, the Property m question was bought for £3 and sold for £7/10/-, the additional £4/10/wholly fictitious value added by the and if it were written oft he *°nld be losing nothing, for he never put out that money; the value was only on paper. Hi. ori-inal capital would be sate and could be repaid in due course .with the usual 5 ner cent interest for the time it was lent. If in such cases as, this the land coulu Bp revalued to something like itc legworth the mortgagee would be none tlie worse'off; there would be no real repudiation of a debt, and it would enable the m ? to be relieved of an impossible and nrushte-- burden of debt, to improve bis farm, and to pay interest on the invested Ca The l ‘adoption of some such plan would be of great benefit to the whole country, fo.. n measure of relief like this, would a mn the means of improving his land instead of letting it go back to am, etc., ALPHA. Waipawa, June 6.