MORTGAGE CORPORATION.

Manawatu Standard, Volume LV, Issue 177, 26 June 1935, Page 10

MORTGAGE CORPORATION.

CONTRACTS NOT DESTROYED. STATEMENT BY MINISTER. Per Press Association. WELLINGTON, June 20. The acting-Minister of Finance (Hon. A. 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 the 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 terms of section 37 of the Act the corporation, upon a transfer taking place, will have in respect to such securities all .the powers, rights, privileges, and discretions of the Superintendent of State Advances, or any other departments. “Thus, it is clear that the existing contracts will not be destroyed as is suggested, for the corporation is not empowered to vary the terms of the mortgage in any way without the consent of the mortgagor. “On the other nand, the mortgagor is given an additional right under the Act whereby he can require the corporation to vary the mortgage to give him a lower rato of interest provided lie 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 will thus he able at any time within three years after the transfer to obtain a reduction in the rato 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 substantial concession.”