MORTGAGE RELIEF.

Star (Christchurch), Volume XLIV, Issue 375, 17 March 1932, Page 4

MORTGAGE RELIEF.

Bill to Amend Act Before Parliament. PRIME MINISTER EXPLAINS. (Special to th© “ Star.”) WELLINGTON, March 16. A measure which is designed to give relief to mortgagors and tenants was

introduced in the House last night by Governor-Gen-eral’s message. It was the Mortgagors’ and Tenants’ Relief Act Amendment Bill, which extends the provisions of former legislation and widens its scope, giving power for cases not covered by earlier legislation to be brought into Court.

The main Act had worked smoothly, said the Prime Minister in explanation, a large number of settlements between mortgagor and mortgagee taking place outside the Court. He believed a large majority of the mortgagees had fallen into line with the spirit which was expected from people in the present circumstances, and had made adjustments enabling farmers to carry on their industry. From his own knowledge, very substantial remissions in regard to interest and mortgages generally had been made. In Canterbury there had been arrangements by which the proceeds of the farm had been pooled, and an allowance made to the farmer to enable him to carry on, and, after certain payments had been made, the residue was divided between the stock and station agents, banks and whoever else had an interest in the property. This had enabled the work of the farm to proceed under a reasonable businesslike arrangement, though in a great many cases there had been no profit and the mortgagee had received no interest whatever. A Widened Scope. This Bill, continued Mr Forbes, would extend the operation of the former measure so that it would apply to all securities besides farming securities. (Hear, hear). Formerly it had applied only to farm mortgages, now it would cover all mortgages. Mr W. E. Barnard (Napier) : Town mortgage?* too? Mr Forbes: Yes. He added that the Bill gave the mortgagor the right to approach the Court, although the mortgagee had done nothing towards foreclosing. This would enable the Court to review a case where relief was asked. Adjustment Courts were in operation and where a mortgagor appealed his case could be referred to them and a recommendation made to the Court. This would enable investigation to be made particularly in regard to farm lands by those having knowledge of the business. Relief to Lessees. The Bill would give the Court authority to grant relief to lessees, whether by way of remission or reduction of rent, as the Court had power to deal with rents, a very much wider power than formerly. Answering a question as to whether it would apply to all rents, Mr Forbes replied that it covered leased premises, as all leases came under the Bill. It could hardly cover weekly tenancies, but only those which involved some permanent arrangement by which the Court could adjust the rental. There was also a clause under which the personal covenant in relation to mortgages could be reviewed if hardship could be proved. Does it apply to chattels?” asked a member. Mr Forbes replied in the negative, and answering another question said that guarantors were already covered by the legislation where there was an element of hardship. Mr H. G. R. Mason (Auckland Suburbs) : Anything about reducing interest? The Prime Minister: “The Court has power to reduce interest or to remit and extend the repayment period of a mortgage, though there is no power to reduce the principal sum.” He believed the Bill would go a long way to meet the many cases of hardship, though there were some personal instances which had been mentioned in the House, which no legislation could cover. If there were any attempt to anticipate the provisions of the Bill before it came into operation, the Government would take steps to deal with the position as was the case last session when the date of operation was made retrospective. In any case Parliament would be in session when the present Bill became operative. Chattel securities were dealt with in the previous Act and the only alteration made was an extension of the date within which the holder of a chattel security could act, the borrower having fourteen days in which to make application to the Court for a review. Farmers had to depend a great deal upon the assistance given by stock and station agents, and it would be unwise to introduce any provisions which would make it more difficult to conduct the present system of doing business.