HOUSE PURCHASE DEPARTMENT:
ADMINISTRATION & POLICY
(continued)
Bank Committee: March 15th 1937 (continued)
Revised House Purchase Scheme - Suggested Covenant by Builder.
As directed by Minute No 5816, your Sub-Committee have reviewed the condition imposed under the revised House Purchase Scheme that builders, etc (in addition to being required to deposit collateral security) should take back houses in case of default by the borrower within certain periods. This condition has proved to be somewhat onerous and is operating against business being transacted with builders.
Your Sub-Committee, therefore, recommend that the Scheme adopted by Minute No 5777 should be amended by deleting the clause requiring the builder or person developing a housing estate to take back houses in case of default by the Mortgagor, it being understood that individual applicants for advances to purchase such houses must be approved by the Bank without investigation into the circumstances of the applicants.
Procedure as to Progressive Mortgages and Allotment Mortgages.
As directed by Minute No 5866, your Sub-Committee have reviewed the procedure relating to these matters.
With regard to progressive mortgages, they are of opinion that in order to save duplication, your Sub-Committee should be empowered to approve advances in individual cases, and that the Town Clerk should be given general authority to prepare any necessary documents in each and every such case, affixing the Corporate Seal thereto, and your Committee are recommended accordingly.
They are of opinion that applications for loans on allotments should be dealt with in a similar manner to applications for loans on house purchase property and therefore, recommend that your Sub-Committee be empowered to deal with such applications instead of the Finance & General Purposes Sub-Committee as at present.
Transfer of further mortgages from Solihull Urban District Council.
The Solihull Urban District Council have now come to terms with the Public Works Loan Board whereby a further 13 mortgages entered into under the Housing Acts, 1923, can be transferred to the Bank. The outstanding amount of the loans represented a total of £4,716. 7. 8. and all the cases are subject to monthly repayments.
Your Committee have already given all necessary instructions in this matter by Minute No 5799 passed on 30th October 1936.
5912 RESOLVED:- That the revised House Purchase scheme adopted by Minute No 5777 be amended, by deleting the clause requiring the builder or person developing a housing estate to take back houses in case of default by the mortgagor; it being understood, however, that individual applicants to purchase such houses must now be approved by the Bank instead of cases put forward by the builders being accepted by the Bank without investigation into the circumstances of the applicants.
5913 RESOLVED:- That the House Purchase Sub-Committee be empowered to authorise advances for the erection of houses by way of progressive mortgage and to give any necessary instructions; and that the Town Clerk be given general authority in each and every case to prepare any necessary documents, affixing the Corporate Seal thereto.
5914 RESOLVED:- That the House Purchase Sub-Committee be empowered to deal with applications for loans on Allotments instead of the Finance & General Purposes Sub-Committee.
Bank Committee: June 21st 1937
5988 The following report of the House Purchase Sub-Committee was presented:
Collateral Security - Sealing of Documents.
It is necessary for the Town Clerk to prepare and seal certain documents where collateral security is found by the Borrower for covering excess advances made by the Bank and also in respect of Guarantee Agreements.
Your Sub-Committee therefore recommend that a general authority be given to the Town Clerk to prepare and affix the Corporate Seal to such documents where necessary.
Mortgages transferred from the Solihull UDC - Arrears, etc.
By Minute No 5964 of your Committee, directions were given to the Town Clerk to consider the legal position with regard to taking action in cases of arrears in respect of these Mortgages.
The Town Clerk, in a report to your Sub-Committee on the matter, points out that as the original advances were made by Solihull under the powers conferred on them by the Small Dwellings Acquisition Act, 1899, and subsequent amending Acts, it is not possible to transfer to the Municipal Bank the whole of their rights and liabilities under such Act. In order, therefore, to enable the Birmingham Corporation to enforce the Mortgages, it has been necessary to obtain the authority of the Solihull UDC to use their name in all proceedings.
It appears that two courses are open to a Local Authority where default is made in punctual payments of principal or of interest, or (in certain cases) where the terms and conditions upon which the loans were granted have been contravened, viz:
(a) The Local Authority may order the sale of the house without taking possession and if unable at the auction to sell the house for a sufficient sum to cover the liabilities, they may take possession of the house as provided by the Act.
(b) The Local Authority may take possession of the house by proceeding in the appropriate County or Police Court.
Your Sub-Committee, after considering this question, were of opinion that it was desirable where possible for ordinary bank mortgages to take the place of the Solihull Mortgages in such case of default, and they therefore recommend that all mortgagors who fall into arrear with their payments be informed by the General Manager that the option will be given them of discharging their present Mortgages, and entering into the ordinary form of bank at their own expense, but that otherwise steps may be taken to take possession of the houses by proceedings in the appropriate County or Police Court, or, if considered more expedient, to sell the property.
They further recommend that the General Manager be instructed to report individual cases in which the option above referred to is not accepted by the Mortgagor, with a view to appropriate instructions being given. Action has been deferred in the existing Solihull Arrear cases until this procedure has been adopted.
Your Sub-Committee also recommend that, in respect of any breach of the terms and conditions of the Mortgage (other than the arrear cases dealt with above) the General Manager should endeavour to arrange for the Mortgage in question to be replaced by a Bank Mortgage.
The desirability has been considered of including a clause in the general powers which may be promoted by the Corporation to give the Bank full powers in respect of the Solihull Mortgages, but your Sub-Committee do not at present consider that such a course is necessary.
Loan to First National Housing Trust.
Your Sub-Committee report that, in accordance with Minute No 5975 of your Committee, the General Manager made an offer to the Trust of a loan for the erection of approximately 3246 houses on the Pheasey Estate on the terms and conditions laid down by your Committee.
A
letter has now been received from the Trust accepting the offer and agreeing to all the terms set forth in the General Manager's letter.
Full authority has been given by your Committee for the matter to be proceeded with, and reports will be submitted from time to time
in the usual way as the matter proceeds.
With reference to the paragraph in the report of the House Purchase Sub-Committee relating to Mortgages transferred from the Solihull Urban District Council, the Town Clerk explained that the condition under the Small Dwellings Acquisition Act, 1899 referred to in his report to the House Purchase Sub-Committee requiring the proprietor of a house to reside in such house, has been amended by subsequent legislation. The amended condition requiring the proprietor to reside in the house has effect for a period of three years only from the date of the advance, or the date of completion of the house, whichever is the later, and compliance with this condition may at any time be dispensed with by the Local Authority. This position had been taken into account in framing the report of the House Purchase Sub-Committee.
5991 RESOLVED:- That, in respect of Mortgages transferred from the Solihull Urban District Council, all mortgagors who fall into arrear with their payments be informed by the General Manager that the option will be given them either of paying off the arrears forthwith, or discharging their present mortgages and entering into the ordinary form of Bank Mortgage at their own expense; but that otherwise steps may be taken to take possession of the houses by proceedings in the appropriate County of Police Court, or if considered more expedient, to sell the property.
House Purchase Sub-Committee: October 18th 1937
Application for Advances.
Your Sub-Committee report that since the last Meeting applications have been granted as follows:
House Purchase - 360 cases
Allotment - 1 case
Progressive Mortgages - 4 cases
Legal Charges for Preparation of Progressive Mortgages.
By Minute No 5646, it was decided to continue the policy of making a flat rate charge of £1 per centum irrespective of the amount of the advance.
On Mortgages above a certain amount, this charge is not in accordance with the legal scale and it is therefore recommended that the Minute be amended so as to provide that a charge be made by the Town Clerk of £1 per centum, or the legal scale charge, whichever is the less.
Arising out of this matter, consideration has been given as to whether it would be in the best interests of the Bank to refund the Town Clerk's charges for the progressive mortgage to the mortgagor, where purchasers of the houses, when completed, enter into ordinary mortgages with the Bank, and your Sub-Committee consider that although the Town Clerk's charges should be paid in the first instance, a proportionate rebate should be allowed to the builder or other person entering into a progressive mortgage in such cases. They recommend accordingly.
Progressive Mortgage - J Wilkes & Son.
Your Sub-Committee have considered the circumstances in regard to an appeal by Messrs J Wilkes & Son against the charge of £1 per centum in respect of houses being erected on the Brook End Estate, they contending that when the application was made for a progressive mortgage, it was in respect of 59 houses which would be erected in blocks from time to time. Your Sub-Committee consider that Messrs J Wilkes & Son have grounds for their contention, and they recommend that no charge should be made to the firm in respect of the preparation of Mortgages covering the 59 houses.
Proposed Sale of No 32, Broughton Road, Handsworth.
Your Sub-Committee recommend that arrangements be made for this property to be put up for sale by public auction, subject to the Town Clerk being of opinion that this course is correct. The wife of the mortgagor, who is at present in Winson Green, has arranged to give up possession and forward the keys, so as to enable the Bank to exercise their powers as mortgagees to sell the property. They therefore recommend that the Town Clerk and General Manager be instructed to take any necessary action accordingly.
Sale of No 30, Ilford Road, Short Heath.
Your Sub-Committee have considered an application by the wife of the mortgagor of the above property (the latter being of unsound mind) that the surplus arising from the sale of the property should be paid to her for the maintenance and benefit of herself and her three children. The Town Clerk, who has been consulted, agrees that the payment may be made and your Sub-Committee recommend that the General Manager be authorised accordingly.
[The Bank Committee, on considering the above recommendations on October 18th 1937, passed Resolutions (Minutes Numbered 6048 to 6052) confirming the actions and decisions of the House Purchase Sub-Committee, except that the question of the refund of charges in respect of progressive mortgages be referred back to the Sub-Committee for further discussion in the light of the discussion held at the Committee's meeting]
Report of the Town Clerk: December 31st 1937
Fernbank
Estate, Alum Rock Road.
Culverting Washwood Heath Brook Course.
Arrangements are being made with Messrs Southall Bros & Barclay Ltd who are the owners of the property on the west side of Washwood Heath brook between L. M. & S. Railway and Alderton Road, the Corporation being the freeholders of the land on the east side of the brook, for the straightening and culverting of the brook course. Such straightening requires the exchange of land between the Corporation and the Company. The Corporation land is subject to leases of various plots for terms of ninety nine years, and certain of these plots with the dwellinghouses erected thereon are subject to a Bank Mortgage. The following are the properties which are in Mortgage to the Bank:
73 Fernhurst Road - Charles Henry Quartermain
11 Jephcott Grove - Ralph William Perry
8 Jephcott Grove - William Ernest Tarling
11 Jephcott Grove - John Jones
The effect of the widening of the brook course will mean that two of the owners will receive additional land to be added to their respective Leases, and two will surrender a small portion of land from their Leases and receive in exchange a further small portion to be added to their respective Leases. All the owners have agreed to the transaction without compensation as they realise it will improve their property, particularly as to prevent the rear of their gardens from flooding at certain times of the year as heretofore, and a substantial fence is to be erected along the new boundary line by Messrs Southall Bros & Barclay Ltd.
I shall be glad to receive the authority of the Committee to seal the necessary documents to release the property from the Bank Mortgages affected by the exchange, and to take into any existing Mortgage any land acquired by a Mortgagor as result of the exchange.
[Approved by the Bank Committee (Minute 6117) January 17th 1938]
House Purchase Sub-Committee: January 17th 1938
6123 The following report of the House Purchase Sub-Committee was presented:
Inspection of Properties.
On the 16th March 1936, your Committee decided that the practice be not adopted of making periodical inspections of properties in mortgage to the Bank with the object of safeguarding against depreciation but that the General Manager be authorised in such cases as he considers so expedient (owing to arrears or other sufficient cause brought to his notice) to arrange for the properties in question to be visited to ascertain whether these are being maintained in reasonable condition.
Your Sub-Committee have now given further consideration to this question and have had before them a report by the General Manager. They consider that having regard to the larger number of advances being made with longer periods for repayment and the general depreciation of certain classes of property, the following steps should be taken:
(1) That in suitable cases of arrears the Mortgagor may be seen with the object of recovering the arrears and at the same time noting whether the property appears to be kept in a reasonable condition;
(2) That in suitable cases where claims are made under the Fire Policies, visits may be made with the object of noting the condition of the properties.
(3) That where a general depreciation in value has taken place or is likely to take place in certain streets or districts, an inspection should be made of houses in which the Bank is interested.
They recommend that this procedure be adopted and the instructions contained in Minute No 5647 amplified accordingly; also that the General Manager be instructed to take any necessary steps.
6230 RESOLVED:- That the recommendations in the foregoing report relating to the inspection of properties be approved; that the instructions contained in Minute No 5647 be amplified accordingly, and that the General Manager be instructed to take any necessary steps in the matter.