INTEREST UNPAID

New Zealand Herald, Volume LXXIV, Issue 22714, 28 April 1937, Page 12

INTEREST UNPAID

MOKTGAGOBS' ATTITUDE APPLICATIONS FOR RELIEF AWAITING ADJUSTMENTS Complaint that many mortgagors have taken advantage of the fact that they have made application for relief under the Mortgagors and 'Lessees .Rehabilitation Act by refraining from paying interest, either in whole or part, pending the hearing of their cases before the Adjustment Commissions, is made by solicitors. "Such mortgagors are causing much hardship among mortgagees," said one solicitor. "There are large numbers of old people, widows and children, who depend on returns from mortgage investments for their existence, so that the position is serious." Representations have been made to the authorities, it is stated, on the matter. As a result, it is believed that commissions have received certain instructions. It is pointed out that commissions take each ease on its merits in which such matters as the good faith and endeavour of mortgagors and lessees to meet their commitments are naturally important. It is now apparent, solicitors further state, that in a substantial proportion of eases the commissions are reducing both principal and interest in respect of mortgages. They are bound by a maximum limit of interest of 4$ per cent in the case of first mortgages. The interest assessed depends 011 the circumstances, and there have been instances where it has been fixed at under 4 per cent. On State mortgages the authorities agree 011 4 5-8 per cent, reducible to 4 1-8 per cent on prompt payment. So far as reductions in principal sums arc concerned, it is further stated that the Metropolitan Commission is networking on any percentage basis. It deals with the circumstances of each case. It is said, however, that with j several mortgages in which past interest had been capitalised under previous "adjustments it has made some drastic cuts. There has been some stringent pruning where it has considered that properties were burdened with a deadweight of old debt.