MORTGAGE MONEY

Evening Star, Issue 21232, 13 October 1932, Page 13

MORTGAGE MONEY

PLENTY AVAILABLE GiLT-EDGED SECURITY DEMANDED [Special to the ‘ Star.’] CJ.-IKJSTCIIU.IICH, October 12. Though there is actually plenty of money waiting for investment in rural mortgages, the market remains stagnant because potential mortgagees will not consider lending their money unless tho security offered is gift-edged. Tins was the consensus of opinion among lawyers and others seen to-day. In tho past year it was estimated by the principal of a firm responsible for £2,000,000 of mortgage money, that he had not lent more than £5,000 on land, though in normal times tho annual amount averaged about £50,000. The provisions of tho Mortgagors’ Relief Act, and the existence of Jlistrict Mortgage Adjustment Commissions were in part to blame for the timidity of potential lenders. It was asserted in one quarter that a mortgagee did not know where he stood. Mortgagees hail been astonishingly generous in the mass to their mortgagors. This man added that many mortgagees were accepting as low a rate of interest as .'if per cent, or 4 per cent, on mortgages arranged at 6 per cent. “ I have more money waiting for good mortgage investment than 1 have had for some time, but tho natural, insistence of lenders on gilt-edged security keeps tho money frozen. What I would like to see would bo a block reduction of all mortgage interest to, say, 4-J per cent.- Then there would bo some footing for transactions.” Agreeing that there was money about for country mortgages, another pointed out that one of the difficulties was that it was hard to assess the real value of either rural or suburban land. Moreover, people now wished to be certain of the personal factor before accepting mortgages. Willingness to pay on tho part of mortgagors was probably as important as ability to pay. “ There is nothing at all doing in mortgages, nor will there ho till tho general conditions improve,” declared another lawyer handling large mortgage interests. Among comments was a statement that there had been signs of a slight increase in activity in house mortgages in Christchurch within the past three or four weeks. There had been a little inquiry for house mortgages on behalf of people who wished to build with this assistance. “In my opinion, losses on town first mortgages have been less than was expected, and oven where interest is not being paid the mortgagee still has his security. I think when conditions begin to take an upward turn mortgages will come back to favour as a- form of investment.” Mortgage money belonging to trustees was particularly stagnant, a man who is a trustee of several largo estates remarked. Tho margin of security offering nowadays was not sufficient to attract lending, in his view. There was a constant and large demand for mortgage money. “ Yon could lend any amount of money on mortgage if you wanted to.”