HOUSE PURCHASE DEPARTMENT:
ADMINISTRATION & POLICY
(continued)
Bank Committee: May 23rd 1921
818 The following report of the House Purchase "A" Sub-Committee was presented:
Applications for Advances.
Your Sub-Committee have since their last Report, held four Meetings and have had before them 46 House Purchase applications, advances were authorised in 44 cases and two applications were adjourned for further enquiries to be made. In four instances the advances were cancelled; in two cases owing to delay on the part of the applicants, the remaining applications were withdrawn.
819 RESOLVED:- That the report of the House Purchase "A" Sub-Committee be approved.
Sale of Property.
Your Sub-Committee have had before them four cases where the Mortgagors proposed selling property in respect of which advances had been granted by the Bank. The proposals were acceded to, subject to the payment of the Bank charges authorised by Minute No 793 of the Committee.
819 RESOLVED:- That the report of the House Purchase "A" Sub-Committee be approved.
820 The following report of the House Purchase "B" Sub-Committee was presented:
Your Sub-Committee have, since their last Report, held three Meetings, and have had before them 22 House Purchase applications. Advances were authorised in 17 cases and 5 applications were adjourned for further enquiries to be made. In five instances advances were cancelled, the applications having been withdrawn.
Sale of Property.
They have had before them 2 cases in which advances had been granted on two houses in each instance and the borrowers were now desirous of disposing of one of such houses.
Your Sub-Committee have intimated in each case that, subject to the payment of the authorised charges and the discharge of the existing Mortgage, they are willing to agree to the proposal and to authorise the issue of a new Mortgage on the property remaining at the new rate of interest.
821 RESOLVED:- That the report of the House Purchase "B" Sub-Committee be approved.
The Committee considered the question of second Mortgages on property in respect of which advances had been granted by the Bank.
822 RESOLVED:- That a provision be incorporated in the Mortgage Deed to the effect that a second Mortgage shall not be entered into without the consent of the Committee of Management.
Letter to Mr F W Daniels (Committee Member)
Newton Chambers,
45, Cannon Street,
Birmingham.
June 9th 1921.
Dear Mr Daniels,
Re Amendment of Mortgage to provide for it being called in on notice of a Second Mortgage being received.
I have carefully considered this matter. I am not aware of any other case where the course suggested has been adopted, or of any decision directly bearing on the point submitted to me for consideration; on principle however, I do not see any objection to the form of mortgage being altered as proposed. The Alteration will not in any way clog the equity of redemption as the mortgagor will still be entitled to reduce in manner provided by Clause 3, 4, and 5 of the form of mortgage, and he will also be at liberty to create any further mortgage or charge on the equity of redemption if he shall so desire; the only result being that if he does an event will arise making the moneys owing by him to the Society payable immediately, but as stated in Palmer on Debentures, 12th, ed., p. 276:
" a provision for accelerating the time for payment of the principal moneys is not a penalty against which equity can relieve. Thompson v Hudson L.R. 4. H.L.1. Wallingford v Mutual Society 5 App. Cas. 685."
I might also point out that debentures which are a form of mortgage often specify various events on the happenings of any of which moneys primarily payable at a distant date are made immediately payable. I think that the desired object can be achieved by inserting in Clause 3 of the Society's form of mortgage after the words "herein contained", the words "or shall create any further mortgage of or charge on the premises hereby mortgaged." I do not think it necessary or desirable to also add a covenant by the mortgagor to this effect, as such a covenant might possibly be held to create a clog on the equity of redemption.
I regret the delay, but the matter has occasioned some considerable research.
If you would like to show this letter to the Town Clerk, I have, of course, no objection.
Yours faithfully,
(Signed) C Ashford Elton
Bank Committee: June 20th 1921
On Minute No 822 the Town Clerk reported as follows:
June 17th 1921
Second Mortgages.
With reference to the instructions of your Committee as to prohibiting second mortgages, I have to report that the form of Mortgage will shortly require to be re-printed, and your Committee may consider it desirable to defer any further amendment of the draft in the meantime.
At present, the original form is amended by hand in each case to provide for the Borrower remaining a depositor.
Further amendment may also be necessary to carry out the Committee's instructions to the Manager as to payment of Bank charges in case of Borrowers paying off voluntarily within twelve months.
I shall be glad to receive the Committee's instructions as to whether an immediate revision is desired.
833 RESOLVED:- That consideration of the question of second mortgages referred to in the Town Clerk's Report be postponed for three months.
853 The following report of the House Purchase "B" Sub-Committee was presented:
Advance to married woman.
An application was received from Mrs Bullivant, to whom an advance of £300 for 20 years had been authorised subject to the usual requirement as to the husband joining in the Mortgage as surety. Mrs Bullivant now asked that this requirement might be dispensed with as she was obtaining a divorce. Your Sub-Committee have acceded to the request, subject to the Town Clerk being satisfied as regards security.
Leasing of Mortgaged property.
A letter was received from Messrs Lane Clutterbuck & Co applying for permission for their Client (Mrs L Carter) to lease to another party certain shopping, portion of premises Nos 834 & 836, Stratford Road, in respect of which she is Mortgagor to the Bank.
The request was acceded to, subject to the terms of the Lease referred to being to the satisfaction of the Town Clerk.
Instalments overdue.
Your Sub-Committee are of opinion that in several cases where instalments are in arrear, a useful purpose would be served by notifying the Mortgagors. They therefore recommend your Committee to instruct that subject to the discretion of the Manager, intimation be sent to Mortgagors when repayments are overdue.
854 RESOLVED:- That, subject to the discretion of the Manager, intimation be sent to Mortgagors when House Purchase repayments are overdue.
Bank Committee: July 18th 1921
882 The following report of the House Purchase "B" Sub-Committee was approved:
Application from Selly Oak Colleges.
Your Sub-Committee have had before them an application from Selly Oak Colleges per Messrs Pinsent & Co, Solicitors asking if the Bank would consent to an arrangement whereby advances could be made in the first instance to teachers on the College Staff, who would later transfer their mortgages to the College Trustees.
Your Sub-Committee were of opinion that the course indicated would not be in compliance with the Act and Regulations relating to the Bank. They accordingly instructed the Manager to inform Messrs Pinsent & Co that the power of the Bank to make advances is limited to facilitating the purchase of dwellinghouses by depositors and that the request could not therefore be acceded to.
Leasing of Mortgaged Properties.
A letter was received from Messrs Newey & Sons, Solicitors, on behalf of their Client, Mr J Left, to whom an advance was recently authorised in respect of property, 223 Aston Lane, Perry Barr. Messrs Newey & Sons intimated that their client desired to grant an Occupation Lease of the premises for a term of 7 years and enclosed draft for approval. Your Sub-Committee have referred the matter to the Town Clerk and the Manager to ascertain the circumstances of the case, and if they are of opinion that consent should be granted it will be necessary for the authority of your Committee to be obtained to the affixing of the Corporate Seal to the requisite document.
NOTE The Chairman (Mr Councillor Appleby) has since consented as a matter of urgency to the application of Messrs Newey & Sons being acceded to.
In this connection a similar authority will be required in the case of Mrs L Carter who, as reported to your Committee at their last meeting, was granted permission to lease premises 834 Stratford Road, Sparkhill, in respect of which she is Mortgagor to the Bank.
The Town Clerk has now approved the draft Lease, and your Sub-Committee recommend that he be authorised to enter into and affix the Corporate Seal to the requisite document in the matter.
883 RESOLVED:- That the Town Clerk be authorised to enter into and affix the Corporate Seal to any requisite documents in connection with the leasing of the premises 223, Aston Road, Perry Barr, and 834, Stratford Road, Sparkhill, referred to in the foregoing report.
Bank Committee: October 14th 1921
On Minute No 907 the Town Clerk reported as follows:
October 5th 1921
Legal Charges on Repayment.
With reference to the scale of charges fixed by your Committee in April last, I have to report that as the result of experience it is found that these charges are sometimes objected to by Borrowers of their Solicitors, and it does not appear possible to enforce payment uniformly without making a special provision in the standard form of mortgage deed. Perhaps, therefore, your Committee will prefer to suspend the charges for the present, and to reconsider the matter in the light of further experience when the standard forms are next reprinted.
930 RESOLVED:- That the matter be deferred until the standard form of Mortgage Deed is next reprinted.
Report of the House Purchase "B" Sub-Committee:
Advances on post-War houses.
Your Sub-Committee are of opinion that, in view of the present tendency of the market value of post-War property to rapidly diminish, the question of amending the limit adopted in regard to advances on such houses should be reconsidered.
945 RESOLVED:- That the question of amending the limit adopted in regard to advances on post-war houses be referred to a joint meeting of the two House Purchase Sub-Committees to consider and report their recommendations thereon.
Bank Committee: December 19th 1921
The following report of the House Purchase Sub-Committee was presented:
Appointment of Chairman
Your Sub-Committee report that they have appointed Mr Councillor Fryer to be their Chairman for the current Municipal year.
Times of meetings.
They are desirous of holding their meetings half an hour before the meetings of your Committee. They consider, however, that 11 o'clock would be more suitable for the members and if the alteration could be affected without inconvenience, they suggest that the times of meeting of your Committee be amended to 11:30am to enable your Sub-Committee to meet at 11 o'clock.
Houses for occupation.
With a view to ensuring that the facilities afforded by the Bank for the purchase of houses shall not be taken advantage of for speculative purposes, your Sub-Committee are of opinion that an applicant should be required to state on his application form whether it is his intention to reside in the house in respect of which an advance is required, and they recommend that an instruction to this affect be issued.
Legal and Bank Charges.
Minute No 793 of your Committee provides for certain legal fees and bank charges where property mortgaged to the Bank is sold within a period of twelve months from the completion of the Mortgage, or the original Mortgage is discharged within a like period. Your Sub-Committee are advised by the Town Clerk that it is doubtful whether such charges are admissible under the Rules and Regulations and your Sub-Committee have therefore given the matter further consideration. It is now recommended that the question be held in abeyance until the amendment of the Rules and Regulations are before the Committee when the question should then be gone into of whether power should be obtained for making the charges referred to or whether it would be preferable to make a charge in respect of the preparation of all Mortgages. In the meantime it is proposed that no charges be made.
Sale of Mortgaged property subject to Mortgage.
Rule 77 stipulates that a Borrower who is desirous of selling property subject to a Mortgage shall be permitted to do so on the consent of the Committee being obtained thereto. In cases of this description it has been the practice of your Committee to require the discharge of the first Mortgage before a fresh one is entered onto.
They have given careful consideration to the alternative method of transferring the equity of redemption, and they are of opinion that the present practice is preferable and recommend that it be continued.
Insurance of Properties.
They have also had under consideration the present practice of taking out a cover note for £1,000 immediately a mortgage is completed pending instructions for the preparation of policies. The Borrower is then allowed to decide the amount for which he desires the property to be insured; failing such decision the Bank insuring to the extent of the valuation.
The figure of £1,000 above referred to, is out of proportion to the value of the property in the majority of cases, and your Sub-Committee now recommend that the insurance cover note taken out immediately a Mortgage is completed, be for the amount of the valuation in each case and not for £1,000.
Rate of Interest on House Purchase Mortgages.
Your Sub-Committee have given careful consideration to this question. They have before them a report of the Manager on the subject, containing information as to the practice adopted in this connection by various Building Societies throughout the country.
Your Sub-Committee recommend that no change be made at present in the rate of interest (namely, 1¼d. per £, per month) payable by a Mortgagor.