HELP FOE MORTGAGEES.

New Zealand Herald, Volume LXIX, Issue 21100, 6 February 1932, Page 11

HELP FOE MORTGAGEES.

PRESENT-DAY DIFFICULTIES. LENDERS SHOW LENIENCY. TREATING CASES ON MERITS. The masim that "an honest mortgagor is worth more than a problematical tenant" is being generally adopted by lending institutions in Auckland -with regard to mortgages held by them. Their attitude is based on the assumption that a mortgagor, although unable to meet h'a interest payments, is more likely to preserve the value of a honse or land security than a tenant, whose term of occupancy is liable to cessation. .An executive of a prominent company engaged in handling mortgage business stated yesterday that his firm as a matter of general practice exercised leniency la its treatment of mortgagors. A!! cases of default in the payment of interest were considered purely on their individual merits and the position of each mortgagor was viewed in the light of his financial circumstances. There were many cases under the notice of the company in which the interest had been reduced to meet the mortgagor's ability to pay. In otbef cases the company had gone so far as temporarily to .remit tbe payment of interest and to "nurse" the mortgagor until the return of better times. Tl»{- question of reduction of principal had not been considered by the company, which took the view that such action would be prejudicial to the interests of mortgagees. "No Genuine Case Turned Down." "Nothing can be gained at the present time by turning a decent man out g! his home for the sake of securing a problematical tenant," said the manager of one of tbe largest lending institutions in the city. '-'I can safely say that no genuine case has been turned down by us and no nan will be dispossessed of his home if we are satisfied that he is a trier. We consider a mortgagor is more likely to look after his property than a person whose tenure may be ended at short notice. Tbe value of the security is thus much more likely to be preserved. In all cases we make an inspection of tbe security and if it is found that the mortgagor is preserving the value of the asset to the best of his ability tbe treatment meted out to hixn is always just and generous." In no case had a man been depraved of his bouse by reason of the fact that he could not pay his interest. This was particularly so in cases where inability to pay arose from unemployment. Citing a case in pfiint. the speaker said that a mortgagor, whose principal amounted to over £3OO. had for some time been paying instalments of £1 on tbe interest dne. Tbe circumstances of the mortgagor had now rendered it impossible for him to continue the instalments, but tbe institution had allowed him continued possession of tile property and had undertaken not to press for payment until bis position improved. * Case of a Second Mortgage. "A difficulty arises, however, in cases where there is a second mortgage," tbe speaker added. "In some of these cases, where we have been inclined to lenienttreatment, we have fonnd that the second mortgagee has been pressing for payment. If so, we endeavour to get into touch with the second mortgagee and arrange to assist the mortgagor, or failing that, require the second mortgagee to assume responsibility for tbe first mortgage. There have been isolated cases in which second mortgagees bave been pi esang for payment at an unduly high rate, but as a general rule they have co-operated with us in a splendid manner. "It must, be understood that the assistance we are giving to mortgagors is purely temporary. We do not charge interest, on arrears, nor invoke tbe penalty clause contained in practically all mortgages. In practice tbe payment of interest now due is postponed and the question of total remission of these payments has been left over until such time as values are more stabilised." Steps are beinir taken by the Government to set up Mortgagors' Liability Adjustment Commissions throughout the Dominion, under tbe provisions of tbe, Mortgagors' Relief Amendment. Act, 193 L The commissi'on for the Auckland district is now being appointed and an announce-, ment of tbe personnel is expected within the next few days. Tbe duty of each commission will be to investigate and report on any application for relief referred to it by the Court.