The Evening Star SATURDAY, SEPTEMBER 12, 1936. THE MORTGAGE BILL.

Evening Star, Issue 22442, 12 September 1936, Page 14

The Evening Star SATURDAY, SEPTEMBER 12, 1936. THE MORTGAGE BILL.

Although this measure was introduced almost three weeks ago, little informed criticism has developed except from the chambers of commerce. Nevertheless, the measure presents unusual and remarkable features, to which it is doubtful if mortgagees as a class have given sufficient attention. Wo have already pointed out that the new Act is to apply to all mortgagee in existence when it is passed. Previous legislation on this subject has always expressly excluded mortgages executed! after, April 17, 1931, except replacement mortgages. In the years intervening since that date many loans have been negotiated and mortgages accepted by the lenders in reliance on that exception. Now, however, all mortgages whatsoever are to be made subject to relief. This wholesaling of relief and breach of contract can find no justification in the “economic Mizzardl ” of depression. It can only be defended on the basis that it will apply in reality only to exceptional cases in which the amount of the mortgage exceeds the value of the security, and that the great bulk of mortgages dated after April 17, 1931, will not be affected at all. But this shows the extension, of the Act to be unnecessary, and an unnecessary injustice is the worst injustice of all. The inclusion of farm mortgages of recent date is particularly unfair, because the Bill adopts the same standard of value for all mortgages whenever executed. Thus a farm mortgage granted last month is to be adjusted in the same manner as a mortgage executed before the depression, and the basis in both cases is to be the prices received) for farm products over a period, of from eight to ten years prior to July 31, 1935. The general purposes of the Bill are set out in Section 2. Three classes of applicants for relief are’. there distinguished—namely, farmer applicants, home applicants, and a general class containing all other applicants for relief. We propose to refer only to the provisions relating to home applicants. In regard to this class the section declares that the general purpose of the Act is to retain them in occupation of their homes, and to make such adjustments of their liabilities as will ensure that these do not exceed the value of the property, and that the amount and terms of payment of their liabilities when adjusted shall be such as the applicants may reasonably be expected to meet as they become due, cither out of their own moneys or by borrowing on •reasonable terms. It will be seen that where a homo applicant cannot borrow to meet his obligations, the only standard of adjustment afforded by this general declaration is the ability of the mortgagor to pay out of his own resources, Consequently, when the values of the properties and ■ the mortgage amounts are the same relief will be measured on a more generous scale to a mortgagor receiving £4 a week than to one receiving £6 a week, and less generously to an applicant a single child than to one who has his quiver full. In regard to farm mortgages, the standard of ability to pay is defensible because the value and productivity of the security determine that ability; hub, in the case of all other mortgages, it should he excluded from .the Bill.

The desire to afford relief whatever the cost to the mortgagee is also shown in the provisions relating to properties which have been abandoned by the mortgagor. Even in such cases the mortgagor can get relief, although we can see little reason for it, and the mortgagee will no doubt see less. An examination of the provisions of the Bill shows that, far from being confined to mortgages of land, it is designed to include every mortgage of any kind of property, whether real or personal, within the Dominion. Its scope thus exceeds that of any previous measure, and all securities for money are embraced without exception. Wo take leave to doubt whether this universal regimentation is really necessary, or whether it is in the best interests either of those who borrow money or of those who render the service of providing loans. ;