SOLDIER MORTGAGORS

King Country Chronicle, Volume XXIX, Issue 4747, 17 September 1935, Page 2

SOLDIER MORTGAGORS

PLEA FOR SYMPATHETIC HEARING. BY MR. BROADFOOT. A statement that the Government would arrange for 'all soldier mortgagors to receive the same sympathetic consideration as in the past tvas made by the Minister of Finance (the Rt. Hon. J. G. Coates) in the House of Representatives last week, in reply to a question by Mr. W. J. Broadfoot (Government, Waitomo). Mr. Boadfoot's question was in the following terms: "As many branches of the Returned Soldiers' Association throughout the Dominion are perturbed at the suggestion that all soldier securities are to be transferred to the Mortgage Corporation, will the Minister of Fin-

ance indicate if such transfer is proposed? And if it is proposed, has he the right to recall any public security or securities where special consideration should be extended to any individual or individuals? Does the Minister consider the transfer of such securities to the Mortgage Corporation advantageous to the soldier mortgagors, and why?" "I have to point out that section 30 provides that on a date to be fixed by Order in Council the discharged soldier settlement mortgages shall be transferred to the Mortgage Corporation," said Mr. Coates. "There is, however, power to exclude any mortgage or class of mortgages from the transfer, or subsequently to recall any mortgage that has been transferred should circumstances warrant such action.

"The financial plan upon which the Mortgage Corporation was founded anticipated that the great majority of discharged soldier settlement mort-

gages would be transferred to the Corporation. This is obviously desirable in order to enable the Corporation to spread its administration costs over as great a volume of business as possible and thereby assist in stabilising interest rates to mortgagors at a low level.

Nothing To Lose*

"As all mortgages transferred are administered by the Corporation virtually as trustee for the State, which stands any losses involved, the Government will arrange for all soldier mortgagors to receive the same sympathetic consideration as in the past. That is the policy and it will be maintained. All rights and privileges which the mortgagors now enjoy are preserved to them after transfer by the provisions of the Mortgage Corporation Act. Thus the settlers have nothing to lose and they will immediately acquire a right to have the

interest on their mortgages reduced to the current rate of the Corporation at present, 4% per cent. A general reduction to this rate could riot be agreed to apart from transfer to the Corporation.

"Nevertheless, although it is to the obvious advantage of both soldier settler mortgagors and the Mortgage Corporation that the majority of soldier settler mortgages should be transferred, it is not proposed to force such a transfer in cases where soldier settlers prefer to remain on the present basis. Transfer will be optional to the mortgagor, but the right to share in the reduction of interest to 414 per cent, will apply only to those mortgages transferred. "It will probably be necessary to arrange for the Mortgage Corporation to act as agent for the Crown in the administration of the securities. Otherwise, there would be two field forces operating side by side in every district. This would involve heavier

administration costs all round and these heavier costs would mean that mortgage interest rates would be maintained at a higher level than would otherwise be the case. It is contemplated that the Corporation will build up on a provincial and district basis an efficient field force to review its securities and maintain personal touch with mortgagors. "Except where very special circumstances apply, as for example, in the case of disabled soldiers, it is desirable that soldier settlers should agree to the transfer of their securities to the Corporation and thereby take advantage of the reduced charges offered by the Corporation."