HC Deb 21 June 1920 vol 130 cc1907-9

"It shall not be lawful for any mortgagee under a mortgage to which this Act applies, so long as—

  1. (a) interest at the rate permitted under this Act is paid and is not more than twenty-one days in arrear; and
  2. (b) the covenants by the mortgagor (other than the covenant for the repayment of the principal money secured) are performed and observed; and
  3. (c) the mortgagor keeps the property in a proper state of repair and pays all interest and instalments of principal recoverable under any prior encumbrance,
to call in his mortgage or to take any steps for exercising any right of foreclosure or sale, or for otherwise enforcing his security or for recovering the principal money thereby secured:

Provided that—

  1. (i) this provision shall not apply to a mortgage where the principal money secured thereby is repayable by means of periodical instalments extending over a term of not less than ten years from the creation of the mortgage, nor shall this provision affect any 1908 power of sale exercisable by a mortgagee who was on the twenty-fifth day of March nineteen hundred and twenty a montgagee in possession, or in cases where the mortgagor consents to the exercise by the mortgagee of the powers conferred by the mortgage; and
  2. (ii) if, in the case of a mortgage of a leasehold interest the mortgagee satisfies the county court that his security is seriously diminshing in value or is otherwise in jeopardy, and that for that reason it is reasonable that the mortgage should be called in and enforced, the court may by order authorise him to call in and enforce the same, and thereupon this section shall not apply to such mortgage."

Major HAYWARD

I beg to move, in paragraph (a), "after the word "arrear," to insert the words or in the case of a mortgage where the principal money secured thereby is repayable by means of periodical instalments extending over a term of not less than ten years from the creation of the mortgage such instalments are paid within twenty-one days of their becoming due. This Clause prohibits the mortgagee calling in his mortgage so long as the interest is not in arrear and the covenants of the mortgage are kept, but for some reason or other building society mortgages are exempted from the operation of this Bill. As a matter of fact, the Government in this Bill are merely continuing the exemption which existed in the previous Act, and it is exceedingly difficult to understand why building society borrowers should not receive the protection of this Bill in the same way as any other mortgagor. In their position as landlords they are subject to the same obligations, and I fail to see why they should not have the protection of the Bill in their capacity as mortgagors. It is in order to secure that protection for them that I move my Amendment. I appreciate that the protection should only be extended in the case of building society mortgagors so long as the instalments of principal and interest provided for in their mortgage are kept regularly paid. Taking the two Amendments together which stand in my name, that is provided for. Under the two Amendments, these building society members—for that is who they are—wili have the benefit of the Act so long as they keep up their regular instalments of principal and interest.

Major BARNES

I beg to second the Amendment.

Dr. ADDISON

The main reason for the exemption under the existing Acts referred to by the hon. Gentleman is obvious; these operations under the instalment system, extending over a long period of years, would be quite inequitably and unfairly dealt with by putting in the middle of the course of the operations some provisions altering their incidence which only apply, as these Acts, for a limited term, say of three years. It would dislocate building society finance from top to bottom if we were to accept the Amendment of my hon. Friend, and I trust sincerely he will not press it.

Amendment negatived.

Sir S.ROBERTS

I beg to move, at the end of the Clause, to add a new paragraph-— (iii) Any such Order shall be made, subject to the condition that it shall not take effect if the mortgagor within such time as the court directs pay the mortgagee such sum as appear to the court to correspond to the diminution in the security. My right hon. Friend has been good enough to say he will accept this Amendment, which is an exceedingly simple one.

Mr. A. RICHARDSON

I beg to second the Amendment.

Amendment agreed to.