FARM AND HOME MORTGAGES

Dominion, Volume 30, Issue 46, 18 November 1936, Page 13

FARM AND HOME MORTGAGES

Scope of Relief OPERATION OF NEW LEGISLATION Voluntary Adjustments Encouraged Applications for mortgage relief under the Mortgagors and Lessees Rehabilitation Act of last session close on January 31 next, and a month's extension can be granted only in exceptional circumstances. This limited period does not mean that applicants have been cramped for time. The preliminary steps have been in operation since the passing of the Act, and a wide field already has been covered. The Minister of Justice, Hon. H. G. R. Mason, who is responsible for the administration of the new enactment, said yesterday in an interview that good progress had been made by the Government and State officials in advancing the preliminary work. Indeed, it was expected that the legislation would begin to operate in the near future. No fewer than 60,000 copies of an explanatory booklet dealing with the legislation had been distributed throughout New Zealand, and 40,000 sets of application forms had been printed and sent out. Each set involved not merely an application form, but instructions to the applicant and also forms comprising statements of the facts necessary to be known to the commission in coming to a decision. In the case of farm properties, for example, this involved details which would enable the commission to obtain a full view of the farming operations relative to the property. It did not follow, however, that there would be 40,000 applications for mortgage relief; all the forms distributed would not necessarily be filled in. Three Classes of Applicants. The Minister explained that three classes of applicants for mortgage relief came within the scope of the Act — farmer mortgagors and farmer lessees, home mortgagors and home lessees, and those mortgagors and lessees who were not farmers and whose application was not in respect of their homes. In general, the Act provided that where any property was subject to a mortgage to which the Act applied, the amount secured by the mortgage was to be reduced to the value of the property, or, in the ease of farm lands, the basic value of the farm land. The balance of the amount due under the mortgage would then become unsecured and an "adjustable debt." Prices of Products. Mr. Mason said that considerable detail was involved in arriving at the prices of farm products, necessary to calculate the basic value of the farm lands. "The Act provides that the figure to which the amount secured by mortgages of farm lands is reduced is the basic value of those farm lands. The Adjustment Commission is directed to ascertain the basic value on the basis of the net income that can be derived from the lands by the average efficient farmer. The income is to be calculated by reference to the prices for farm products received over a period from eight to ten .years immediately prior to July 31, 1935.” The work, said Mr. Mason, was complicated by reas.on of the large range of products involved, and also by reason of the great variety of particular products. Wool, for instance, was a product in which there was a great deal of variety. Mr. Mason added that applications were being received now, and he anticipated that the appointment of some Adjustment Commissions would be made almost immediately. At the moment, it Was not expected that there would be an increase in the number of commissions that operated under the previous Government’s mortgage legislation. A feature of the administration of the Act, he said, would be to encourage voluntary settlements.