STATE MORTGAGES

Taranaki Daily News, 29 May 1933, Page 9

STATE MORTGAGES

TRANSFERS OBSTRUCTED. higher Interest sought. Representations have been made to the Associated Chambers of Commerce by the Auckland Chamber regarding what are considered to be vexatious obstacles placed against transfers of properties mortgaged to the Crown. It wris reported to -the council of the chamber recently that a letter had been sent forward embodying a complaint received from Samuel Vaile and Sons, land agents. The firm cited as a specific instance the sale of a property at New Lynn, of which neither the vendor nor the purchaser was a returned soldier. This transaction, it said, was held up for three months and a great deal of unnecessary work and expense were incurred owing to the opposition encountered. The vendor had lately rearranged his Government mortgage on a basis of 5 per cent. net. The purchaser’s deposit was sufficient to pay outstanding rates, interest and instalments of principal, and to give a little to the vendor.

As usual, in such cases, the consent of the Crown lands Board was refused. After a great deal of correspondence it was ascertained that Government wished to seize the opportunity of raising the interest rate from 5 per cent, to' 51 per cent, and reducing the-terms of the mortgage from about 30 years to. 20 years.. A variety of .different fees, with the Crown law costs, were demanded, and all th<? parties were required to appear in person before the board. Eventually, after the matter had been taken up with the Minister of Lands direct, the board agreed. The chamber’s letter expressed surprise that at a time when every endeavour was being made to lower interest rates, the Government should try to obtain an increase in the rate on a Crown mortgage.

Mr. W. R. Fee said the general complaint must surely relate to transfers of soldiers’ mortgages from soldiers to civilians. These mortgages were on specially easy terms and the Government had some justification for asking civilian purchasers to pay more. He could not understand how the Crown Lands Board came to be concerned with ordinary properties mortgaged to the State Advances Department.

Mr. H. E. Vaile, in reply, said the cases all related to ordinary mortgages, but even if Mr. Fee’s- supposition were correct the Government had no justification for trying to raise the rate of interest above 5 per cent., which was the ordinary rate for State advances. The letter was approved.