MORTGAGE FINANCE

Dominion, Volume 28, Issue 108, 31 January 1935, Page 10

MORTGAGE FINANCE

Attitude of Business Community GOVERNMENT PROPOSALS Intimation that a statement of the views of the business community on the proposals of the Government with regard to mortgage finance will shortly be made public, was given yesterday to “The Dominion’’ by the secretary of the Associated Chambers of Commerce of New Zealand, Mr. A. C. Meany, • Mr. Ileany said that Press reports had appeared in which the Minister of Finance, Kt. lion. J. G. Coates, had given an account of the reception of the Government's mortgage finance proposals by the various bodies which he had met in the main centres recently. The Associated Chambers wished to explain. that the main object of such conferences as the Minister had had with commercial, financial and investment interests was not criticism of the proposals, but a better understanding of just what those “somewhat vague proposals,’’ as outlined in the pamphlet published by the Minister, actually meant. of the views of commercial, financial and investment interests throughout New Zealand has-been specially entrusted by those interests to a central committee in Wellington,” said Mr. Ileany. “The views of this central committee have been crystallised in the form of a statement which will be available for public information at an early date. When this statement is published, the views of the commercial, financial and investment interests of New Zealand will be adequately and fully ex 7 pressed therein.” Figures Exaggerated? Mr. Heany went on to refer to the report iu yesterday’s issue of "The Dominion” that since the establishment of adjustment commissions under the Mortgagors and Tenants Relief Act, 1933, approximately 14,000 applications for measures of relief had been received. He said the article did not make it clear what proportion of this total represented applications by farmers for relief as against their mortgagees, what proportion represented urban mortgagors making similar applications, and what proportion of the applications were made by tenants, both urban and rural, for relief against their landlords. According to the 1935 Year Book, there -were 84,368 farm holdings in New Zealand, excluding farm holdings within boroughs and holdings ' under one acre in extent. The basis on which the Year Book figures were compiled was not quite clear, and it was a question whether farmers holding two areas for which there were separ-ate-titles had been counted as owning two holdings, irrespective of whether those two areas were farmed or not. “At first blush it would, therefore, appear likely that a very substantial proportion of the farming community has made application for relief,” he said. “Actually, it may prove that the figures have been exaggerated, and that each separate document making an application for relief has been counted without reference to the question whether that application was dealt with by the commission and the court with other applications affecting the same mortgagor and the same property.” Wellington Cases. The following actual cases which had arisen in the Wellington district were quoted:— Case A: This farmer is farming approximately 900 acres of sheep country. Two-thirds of this area is mortgaged to one mortgagee. The remaining one-third is mortgaged to another mortgagee who, as additional security, bolds a second mortgage over the first area. His stock is mortgaged to a third party. This farmer applied for relief and lodged three separate applications, one against the mortgagee of (he 600 acres, one against the mortgagee of the 300 acres, and one against the mortgagee of the stock. Presumably for the purpose of calculating the 3000 applications in the Wellington district these would be counted as three applications. Actually the whole area Is being farmed as one property, and it would be quite impossible to deal with the farming operations of the area under one of the land mortgages without involving the operations of the other area.

Case B: This farmer is fa ruling approximately 950 acres not many miles removed from the farmer mentioned as Case A. In Case B both sheep farming and dairy farming is in progress’ There are nq fewer than six separate areas, of which five adjoin, while the sixth area is some little distance awav from the others. This farmer has three first mortgagees of different areas of his laud. One of the first mortgagees also holds a stock mortgage over the whole of his stock depasturing pn all the areas.! In addition, there are two second mortgages registered against some of his titles. When this farmer applied for relief lie lodged separate applications against the live several mortgagees, and presumably these were counted as five for the purpose of computing the liumbcr of applications dealt with by tlie Wellington Commission.

Case C is that of a farmer carrying on mixed farming operations on approximately 700 acres. GOO acres is subject to a first mortgage, and also to a second mortgage. The balance is subject to a first mortgage in favour of a relative. His current account is conducted under a guarantee by this .relative who has transferred his first mortgage as security in suopoit of the guarantee, while the farmer himself has mortgaged his stock as additional supporting security. Some considerable time back Hie farmer made separate applications for relief against the first mortgagee anil tile second mortgagee of the GOO acres. Prolonged discussions both before the Commission ami privately took place. The first mortgagee, lieing dissatisfied with the result of these discussions, eventually insisted upon the mortgagor making an application for relief against the stock mortgagee. The whole position was 1 lien reviewed by the commission and eventually an order was made by the court dealing with the rights of all three mortgagees. At a later date, at the instigation of one of the mortgagees—the outlook for this particular farmer having improved —he applied for a review of the court orders and the commission again investigated the whole position, following on which the court made a fresh series of orders. It is by no means clear whether jn this instance the commission. in reporting to the Minister, Ims counted this case as being six applications; three applications, two applications, or merely one.

AUCKLAND MEETING

Proposals Subjected to Close Scrutiny By Telegraph -Press Association Auckland, January 30. Important points in the Government’s mortgage finance proposals which have been suggested for inclusion in legislation which the Government will submit to Parliament next month, were discussed at a meeting of business men and others. Many aspects of the proposals affecting local bodies, lending institutions and other interests were explained by the Minister of Finance. Rt. Hon. J. G. Coates. The meeting was similar to those held by Mr. Coates recently in Christ'churcli and Dunedin, proceedings throughout being of a private nature.

Mr. Coates said the discussions had been of a helpful nature. His proposals had been subjected to close scrutiny, and while there had been some criticism. which, in view of the magnitude of the problem to lie dealt with was to be expected and was even welcomed, those present had not been able to provide him with any workable alternatives.