MORTGAGE CORPORATION

Hawera Star, Volume LIV, 2 March 1935, Page 7

MORTGAGE CORPORATION

_ OPINIONS IN THE HOUSE many amendments proposed PERSONAL COVENANT CLAUSE

(By Telegraph— Press Association.) WELLINGTON, March 1. When, the discussion on the clauses of the Mortgage Corporation Bill was continued in the House of Representatives this afternoon Mr Veiteli moved an amendment to clause 24 with the object of removing the personal covenant. In his opinion mortgages taken by the corporation should be secured by the value of the mortgage asset and that security should not extend to the personal possessions of mortgagors. Mr- A. Harris (Co., Waitcmata) said that under the Bill as it stood at present a worker in a town could seceure a loan of up to only 66 2-3 per cent, of the value of the property, whereas a farmer could get up to 80 per cent. That, lie contended, was not fair. The •worker should be placed on the same footing as the farmer. Mr Veiteh’s amendment was lost on the voices and Mr Savage’s w r as ruled out of order as it involved an appropriation. Mr Coates indicated that measures , were in hand to deal with housing conditions in the cities that would benelit the workers. Mr Savage said the Opposition’s viewpoint was that all electors should be treated alike, but it was not going to vote against the clause because one section received benefit. He classed the clause as a red herring and said that farmers who needed assistance would not receive it from that measure. Clause 24 was passed. On Clause 2 5 Mr Langstone said the State Advances Department could be administered for 3s 4d per cent, and as low as 2s 6d per cent., yet the corporation was allowed one per cent. That showed . Government extravagance and that the cost of administration played a largo part in the rate of interest to the borrower.

•Mr H. G. R. Mason (Lab., Auckland Suburbs) moved an amendment to reduce the administration cost, to a limit of one half per cent., but the amendment was lost.

Mr C. A. Wilkinson (Ind., Egmont) moved an amendment to Clause 26, his aim being to allow the mortgagor to repay his loan in cash at any time if he was able to do so; otherwise he would be tied for 50 years. Mr W. Nash said provision was made for loans under the State Advances Department ,to be paid off at any time, and the corporation was supposed to be something better; yet similar provision was not made. Mr Coates said that in tho case of the State Advances Department, owing to the provision for repayment of loans at any time the department had lost cream of its loans to private individuals, leaving it with doubtful loans, and the taxpayer had had to find larg esums of money to meet the position that had arisen.

The amendment was lost by 34 to 22. Mr Laugstone moved an amendment to Clause 28, making it mandatory that when a sale of property took place the principal moneys should be called up.

Mr Coates said as the clause stood at present, on sale every mortgage must be reviewed, and' if it was incumbent that a new loan shbuld be taken up in every instance hardship would be caused in many cases. The board could call up the principal if it wished. The amendment was lost. Mr W. Nash moved an amendment to the wording of the clause relating to procuration fees to make it unlawful that such payment be received. Mr Coates said he would accept the amendment, subject to the approval of the law draughtsman. This was agreed to.

Another sub-clause was moved providing a penalty for a person receiving procuration fees and provision for its recovery, but the amendment was lost. Progress was reported and the House rose at 5.55 p.m.