MORTGAGE CONTRACTS

New Zealand Herald, Volume LXXII, Issue 22145, 26 June 1935, Page 13

MORTGAGE CONTRACTS

TRANSFER TO CORPORATION INTERESTS OF BORROWERS REPLY TO CRITICISM [BY TELEGRAPH —PRESS ASSOCIATION*] WELLINGTON, Tuesday The acting-Minister of Finance, 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 State Advances or Lands Department mortgagors will not be affected in any way by the transfer of mortgages to the corporation. In the terms of section 37 of the A>'t the corporation, upon transfers taking place. Mill have in respect to such securities all the powers, rights, privileges and discretions of the superintendent of the State Advances or other person entitled to exercise them under the mortgages in question. Thus it is clear that existing contracts will not be destro.yed, as suggested. "The corporation is not empowered to vary the terms of a mortgage in any way, without the consent of the mortgagor. On the other hand, the mortgagor is given an additional rightunder the Act, whereby he can require the corporation to vary the mortgage to give him a lower rate of interest, provided that 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.

"Thousands of mortgagors thus will be able at any time within three years after transfer to obtain a reduction in the rate of interest 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." APPLICATION FOR RELIEF PRESSURE OF WORK [by telegraph—press association] PALM.ERSTON NORTH, Tuesday With the object of relieving the pressure arising out of the accumulation of district applications under the Mortgagers' Relief Act a special sitting of the recently constituted Court of Review will be held here on I riday. There are reported to be 350 applications awaiting attention by the 'Wellington district Mortgagors' Commission, though some of these will probably be settled or withdrawn before the date of he_aring The Court will sit here on I'riday onlv and will hold another sitting later.