POINTS CLARIFIED

Taranaki Daily News, 21 September 1940, Page 4

POINTS CLARIFIED

HOUSING AND LOANS

Points regarding the Rural Housing Act and the Farmers' Loan Emergency Regulations, some aspects of which seem to be causing confusion in Taranaki, were clarified when Mr. W. J. Polson, M.P. for Stratford, asked the State Advances Corporation of New Zealand at Wellington to give him particulars on the points concerned. The corporation replied in a letter received by Mr. Polson yesterday. "Advances under the Rural Housing Act. 1939, are made by the county councils and the charges registered to secure such advances are in the names of the county councils concerned," the letter stated. "They constitute a first charge over the properties affected, the payments of the principal and interest being recoverable as rates and any steps by the land mortgagees to exercise their powers can be taken only subject to such prior charges. Apart from this t.he corporation will not be directly affected by any action on the part of the mortgagees as it is merely the creditor of the local body. "Regarding loans granted by the corporation under the Farmers' Loans Emergency Regulations, 1940, the regulations enable a charge to be taken over land and stock ranking pari passu with that of the first mortgagee of the land or stock as the case may be. Charges of this nature are .subject to the Mortgages Extension Emergency Regulations, 1940. Sub-paragraph 2 (c) of paragraph 5 of the regulations provides as follows in relation to the corporation and any other creditor with a charge ranking pari passu with that of the corporation:— "Either creditor may exercise any power of sale exercisable under his security and the creditor exercising that power may transfer the property to any purchaser freed and discharged from all liability on account of the charge or of any mortgage alfecting the property. "The corporation has, therefore, no power to prevent a ranking first mortgagee from exercising his powers as far as the existing law permits and in the event of the power of sale being exercised by such a party the corporation is merely entitled to receive its proportionate share of the proceeds resulting from the sale."