RURAL MORTGAGES
Effect of Corporation Act MORTGAGOR LOSES NOTHING By Telegraph—Press Association WELLINGTON, June 25. The acting Minister of Finance, the Hon. Adam Hamilton, made the following statement to-day:— The Leader of the Opposition is reported to have said, inter alia, at Maungaturoto, that the effect Of the Mortgage Corporation of New Zealand Act was to destroy financial contracts entered into between the State and its clients.
This statement is not correct. The existing rights of the State Advances’ or Lands Department’s mortgagors will not be affected in any way by the transfer of mortgages to the corporation, and in the terms of section 37 of the Act, the corporation, upon transfer taking place, will have in respect of such securities all powers, rights, privileges and discretions of the superintendent of the State Advances or other person entitled to exercise any such powers, rights, privileges or discretions under the mortgages in question. Thus it is clear that existing contracts will not be destroyed as suggested, for the corporation is not empowered to vary the terms of mortgage in any way without the consent of the mortgagor.
On the other hand, the mortgagor is given additional right under the Act, whereby he can require tho corporation to vary tho mortgage to give him a lower rate of interest, provided he agrees to add 2 per cent, to the principal of the mortgage for the benefit of the reserve fund of the corporation and converts the mortgage to a table mortgage if it is not already in this form. This is a very valuable concession to thousands of mortgagors, who thus will be able at any time within three years after transfer to obtain a reduction in the rate of interest under their mortgages from 5 per cent, and more to the lending rate, to be fixed by the corporation for its own business.
In fact, mortgagors have nothing to lose by the transfer of their mortgages to the corporation, and a great many of them will gain a nhstantinl concession.
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Bibliographic details
Hawke's Bay Tribune, Volume XXV, Issue 163, 26 June 1935, Page 13
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339RURAL MORTGAGES Hawke's Bay Tribune, Volume XXV, Issue 163, 26 June 1935, Page 13
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