H.B. TRIBUNE TUESDAY, JANUARY 26, 1932 MORTGAGORS’ RELIEF.

Hawke's Bay Tribune, Volume XXII, Issue 36, 26 January 1932, Page 4

H.B. TRIBUNE TUESDAY, JANUARY 26, 1932 MORTGAGORS’ RELIEF.

A correspondent, whose letter appears on another page of this issue, has deemed it his duty towards his fellow farmers to call their attention to last year’s legislation providing for relief being afforded to mortgagors. He also incidentally invites comment on what he has to say. Having in view the many queer twists and turns there may be in the interpretation of loosely drawn statutes, this is scarcely a job for a layman. So, all that may be said, from a cursory perusal of the Acts cited by him, is that he would seem to have brought out their salient features with fair accuracy. It may, however, be as well to correct a careless impression that might be gained that only farmers are entitled to the benefits of this legislation, which are really of general application. Then, too, it applies not only to land mortgages and chattel securities, but also to agreements for sale and purchase, to optional or compulsory purchasing clauses contained in leases, and to mortgages over policies securing life assurance, endowments or annuities. It can likewise be invoked for the relief of guarantors. It would seem also to be available in respect of all instruments included in its scope that were entered into on or before 17th April—not 18th March, as mentioned by our correspondent—of last year. Then, again, it may be as well to point out that where chattels are concerned the mortgagee is required to give only seven days’, not a month’s, notice of intention to exercise his powers. Another statement by our correspondent that might easily mislead is that “if the mortgagor is paying his interest, then no mortgage can be called up till after 31st December, 1933.” There are, of course, in almost all instruments of the character dealt with covenants other than that for payment of principal and interest which would entitle a “mort gagee,” as defined in the Acts, to move for leave to enforce his rights. The Court is, in fact, specially directed to have regard to breaches of such covenants. It has also to take into account any prejudice to his security or any personal hardship that might be inflicted on the mortgagee by postponement.

As our correspondent says, we believe that a very great majority, probably greater than he indicates, of mortgagees are quite ready to meet the other side in all reasonable ways. With regard to the rest it has been suggested that the mortgagor should be placed in a position to move the Court for relief without having, as at present, to await a threat of action on the part of the mortgagee. This is a phase of the matter that is certainly worthy of consideration. At the same time, it is not to be forgotten that this legislation is of a quite exceptional character and that over-ready recourse to i< is not in any way likely to popularise mortgage investments among those with money to lend. In fact, it can scarcely be otherwise than that this will be the general effect of merely placing it upon the Statute Book. That is an aspect of the case that was fully discussed in this column when the first Bill was before the House, and it is one that, in the eventual interests of would-be borrowers of the future, should never be lost sight of. Loans on farm securities in particular are already quite sufficiently difficult to negotiate, and legislation of this nature, cutting at the root of the lender’s right to protect himself, is not calculated, even if only temporary, to make this any the easier. Nothing but the very gravest widespread emergency could have justified anything of the kind, and the less that is done to impress it upon the memories of those with money to invest the sooner will farmers’ securities regain the confidence of the money markets.