MORTGAGES IN NEW ZEALAND.

New Zealand Herald, Volume LXVIII, Issue 20968, 3 September 1931, Page 8

MORTGAGES IN NEW ZEALAND.

The customary statement of the total amount of money secured by mortgage under the Land Transfer Act is contained in the annual report of the Land Transfer and Deeds Registration Office, recently presented to Parliament. It gives a total of almost this being exclusive of mortgages' under the deeds registration system.. To arrive at this result, the department has proceeded by the simple process of annually adding the amount of new mortgages registered and subtracting the amounts discharged, a method that has fallen into discredit since it was subjected to critical analysis a few years ago and has been abandoned by the Government Statistician as unreliable and its results excluded from the official Year Book. The latter now states positively that while the annual returns of registrations and discharges constitute "a valuable index," aggregation of them cannot be accepted as indicating the amount of indebtedness incurred by way of mortgage. Duplicate registrations of mortgages over land in two or more districts have been included without allowance for the consequent multiplication of the figures in

the Dominion totals. There is no discrimination in respect of collateral and guarantee mortgages which do not represent money indebtedness; of these there is an extreme example in the case of such a mortgage for £1,000,000, given as security for an issue of debentures, which was registered in five districts. Many discharges are not registered, particularly in the case of leaseholds and also of second or other mortgages when the power of sale has been exercised by the first mortgagee. Moreover, in the case of tablQ mortgages, the whole amount remains on the register till the last instalment of principal has been paid. There are consequently substantial reasons for regarding simple aggregations of annual mortgage statistics with reserve. An attempt was made by the Government Statistician a few years ago to compile a more accurate estimate from the information regarding mortgages furnished in returns of land for taxation. The result was not entirely satisfactory, because a large amount of land, including small residential and other sections of less than £SOO in value, are not covered by these returns. However, it was discovered that mortgages on lands for which returns were furnished did not exceed £152,000,000 in 1928; beyond that the Statistician did not venture, for he says "there is no means of ascertaining even an approximate reliable figure for exempted lands." In view of that conclusion it is obviously misleading to publish an official return suggesting that the unknown liabilities under mortgages are approximately equal to those ascertained from declarations by landowners.