HOUSE PURCHASE DEPARTMENT:
ADMINISTRATION & POLICY
(continued)
Bank Committee: November 11th 1935
On Minutes Nos 5470 and 5479 the Town Clerk submitted the following report as to the completion of the progressive mortgages from Messrs J Wilkes & Son on the general question as to charges in regard to progressive mortgages.
1st November 1935
Minutes Nos 5470 and 5479
Progressive Mortgage Scheme.
Houses at The Hurst, Brook Lane, Hall Green - J Wilkes & Son.
I have to report, with reference to the above Minutes, that I have completed Progressive Mortgages from James Wilkes and Bernard Charles Wilkes, trading as J Wilkes & Son, of two houses in The Hurst, Brook lane, Hall Green. The two houses in question are type "C", and the total amount agreed to be advanced by the Bank in respect of each house is £502. 10. 0.
As your Committee are aware, hitherto no legal charges have been made against Borrowers in respect of Bank Mortgages, but with respect to Progressive Mortgages formerly entered into on the instructions of the Public Works and Town Planning Committees, charges somewhat less than proper scale charges were made. The scale charges vary according to the amount advances, the charges for amounts up to £10,000 being as follows:
First
£1,000 .... 30/- per cent
Second and third £1,000 .... 24/- per cent
Fourth and any subsequent £1,000 up to £10,000 .... 12/6d. per cent
The charge made in respect of the Progressive Mortgages to which I have referred was a flat rate of £1 per centum.
In view of the additional work entitled in connection with Progressive Mortgages, your Committee will perhaps consider the desirability of making some charge against the Borrowers. No charge has been made against Messrs Wilkes & Son, as I understand it was part of the arrangement that no such charge should be made.
I shall be glad to receive your instructions.
5538 RESOLVED:- That the foregoing report be approved and Minutes Nos 5470 and 5479 discharged; that the House Purchase Sub-Committee be directed to consider the whole question of charges for the preparation of bank mortgages (including progressive mortgages); and that in the meantime the Town Clerk be authorised and instructed to impose a charge in respect of the preparation of progressive mortgages at the flat rate of £1 per centum on the lines indicated in his report.
5539 The Town Clerk then referred to the discussion at the Council meeting on November 9th (during consideration in Committee of the projected Birmingham Corporation Bill) in regard to clause 20 to extend the powers of the Bank to make advances for house purchase.
The Town Clerk pointed out that the amended clause as passed by the Council on the 9th instant would alter the original clause of the Bill as then submitted to the extent of enabling advances to be made for any purpose upon the security of any estate in the United Kingdom without territorial limitation.
He submitted that such a radical change in the clause might seriously jeopardise the passing of the clause. The Committee were reminded that the Council by resolution approved the revised Bill subject to such alterations as Counsel and the Town Clerk acting on the instructions of the General Purposes Committee might consider advisable. Accordingly, he now submitted the following further revised clause for consideration:
In addition ..................... the Corporation may
(a) Make advances upon the security of freehold or leasehold estate within the city or any county or county borough adjoining the city by way of mortgage to any depositor in the Bank of the Corporation.
(b) Accept a transfer of a mortgage of or charge upon freehold or leasehold estate belonging to a depositor in any of the areas referred to in paragraph (a).
After consideration the Committee expressed their agreement with the wording of the clause as now proposed and directed that the General Purposes Committee should be requested to amend the draft clause in the Bill on the lines suggested.
5540 During the discussion Councillor Martineau raised the question as to whether it would be possible or desirable to adopt the principle of transferring mortgages with the object of reducing the stamp duty charged to mortgagors and the Town Clerk was directed to report his observations on this point to the House Purchase Sub-Committee.
Bank Committee: December 16th 1935
5546 The Chairman of the House Purchase Sub-Committee reported that at his suggestion, the Town Clerk had considered the desirability of his report on proceedings in Arrear Cases being submitted to the House Purchase Sub-Committee instead of to the full Committee, who would, however, continue to give the requisite instructions. By this means, it would be possible to give more consideration to the current circumstances of each case. The Town Clerk stated that there would be no difficulty in adopting the course suggested, and he was accordingly directed to submit his report on Arrear Cases to the House Purchase Sub-Committee in future.
House Purchase Sub-Committee: December 16th 1935
Alteration of Method of Repayment.
The Sub-Committee have approved the application of Mr M W Singer to be allowed to transfer the method of repayment under his mortgage on property No 37 Portman Road, King's Heath, from the reducing payment method to the equated system of repayment spread over a period of twenty years.
Your Sub-Committee recommend that the Town Clerk be instructed to endorse the mortgage deed accordingly, affixing the Corporate Seal thereto if required.
Bank Committee: January 20th 1936
5603 The Town Clerk referred to a communication which was received from HM Treasury upon the clause in the Bill relating to additional facilities for House Purchase advances and asking for information as to the intention of the clause. The Committee approved of the Town Clerk's suggestion that he, in consultation with the General Manager, should forward a suitable reply to HM Treasury explaining that the required power relates to additional advances or transfer of existing mortgages and is not intended to apply to commercial or industrial properties.
Bank Committee: February 17th 1936
5624 RESOLVED:- That subject to a satisfactory report from Mr Frank Wilde upon submission of plans and specifications, the application of Mr J Burgess for an advance by way of progressive mortgage for the building of a house at Fillongley, Warwickshire, be acceded to, and that the Town Clerk be instructed to prepare any necessary documents affixing the Corporate Seal thereto.
Bank Committee: March 16th 1936
The Town Clerk submitted the following report as to restrictive covenants in respect of the property, No 91, Selly Park Road, in regard to which an application for a house purchase advance had been received:
14th March 1936
HP 18164: 91, Selly Park Road.
I have to report that on investigation of the title of the above property, it appears that the purchase is subject to certain restrictive covenants contained in a Conveyance dated the 20th May, 1864.
One of these covenants requires that every dwellinghouse erected shall have attached to it, at least a quarter of an acre of land.
The house which Mr Bott (the Borrower) is offering as security was erected and sold to the present Vendor in 1928, and occupies a site of 1142 square yards. Although the house has been occupied for more than seven years no action has been taken in respect of the breach of covenant.
The land which is bound by the covenant is in the immediate neighbourhood of houses known as "Selly Wick" and "Little Wick", the former being occupied by Mr R A Pinsent.
In view of any action being taken the Borrower would, under his purchase deed be liable, without any indemnity from his Vendor. In these circumstances a doubt arises as to the wisdom of accepting the security and I shall be glad to receive your Committee's instructions.
The purchase price of the house is £750 and the Borrower has asked for a loan of £300.
5636 RESOLVED:- That after considering the circumstances referred to in the Town Clerk's report, the application for an advance of £300 in respect of the property above referred to be acceded to.
5644 The following report of the House Purchase Sub-Committee was presented:
Legal Charges in respect of Bank Mortgages.
Your Sub-Committee report that a Conference has taken place between your Chairman (Councillor Cooper) and the Chairman of this Sub-Committee (Councillor Martineau), with the Town Clerk and the General Manager upon the various aspects of the question of imposing charges for preparing bank mortgages, including progressive mortgages, which was referred to your Sub-Committee for consideration by Minute No 5538.
When the Bank was established in 1919, it was considered desirable that no charge should be made to mortgagors for the preparation of the Mortgage Deed and the examination of title. This has constituted one of the advantages of house purchase through the Bank, and it is considered that it would be unwise now to introduce such charges so far as ordinary mortgages are concerned.
With regard to progressive mortgages, however, the Conference were of opinion that a charge should be made for the legal work involved and that the interim decision reached by your Committee on the 11th November last to make a flat rate charge of £1 per centum irrespective of the amount of the advance should be continued in future. In reaching this conclusion, it was assumed that it was not the intention of your Committee to grant large sums by way of progressive mortgages, and that the policy was rather to encourage those who desire to build one or two houses than to deal with the development of large estates.
Your Sub-Committee, therefore, recommend that the principle of no charge being made to mortgagors for the preparation of the mortgage deed and the examination of title in the case of ordinary mortgages be adhered to, but that in regard to progressive mortgages the policy be continued of making a flat rate charge of £1 per centum irrespective of the amount of the advance.
Inspection of houses in Mortgage to the Bank.
One of the points raised at the third International Thrift Congress was in regard to safeguards against depreciation of property in mortgage, and in this connection your Sub-Committee have considered whether it would be desirable to arrange periodical inspections of the properties in mortgage to the Bank.
After considering a report of the General Manager on the subject, they do not consider that there is any justification for making periodical inspections, which might be resented by mortgagors generally, and which would involve the Bank in further expense. They consider, however, that the General Manager should be authorised, in such cases as he may consider it so expedient (owing to arrears or other sufficient causes brought to his notice) to arrange for the properties in question to be visited to ascertain whether they are being kept in reasonable condition.
Progressive Mortgage Scheme - House on the Senneleys Farm Estate, Weoley Castle.
On the 22nd July last, your Committee approved an application by Messrs N Thomas & Son for an advance on the
progressive mortgage system to be granted for the building of houses on the Senneleys Farm Estate, Weoley Castle. Messrs Thomas &
Son have not intimated their acceptance of the terms offered by the Bank and, in the circumstances, your Sub-Committee recommend that
Minute No 5489, instructing the Town Clerk to complete the progressive mortgage in question, be discharged.
5646 RESOLVED:- That the principle of no charge being made to Mortgagors for the preparation of the Mortgage Deed and the examination of title in cases of ordinary House Purchase Mortgages be adhered to; but that in regard to progressive Mortgages, the policy be continued of making a flat rate charge of £1 per centum irrespective of the amount of the advance.
Bank Committee: April 20th 1936
The General Manager reported that it was proposed to grant an advance of £250 in respect of property numbered 90 Bristol Road, Edgbaston, which was leasehold, having 39 years unexpired, the advance to be for a period of 10 years. In accordance with Minute No 2886 it was necessary to obtain approval of the full Committee to the making of such an advance.
5667 RESOLVED:- That the advance in question be authorised.
The Town Clerk informed the Committee that an addition had been made to the Clauses in the Birmingham Corporation Bill, after consultation with the Chairman, Councillor Martineau and the General Manager, in order to meet the views of the Treasury that advances should not be made on security of a hazardous or speculative nature. The proviso inserted in the Bill makes it clear that in ascertaining the value of an estate for the purpose of an advance there shall be excluded the value of any building other than (a) a dwellinghouse or (b) a dwellinghouse partly used for some other purpose when the value of the whole building or £500 whichever is the less. HM Treasury have expressed their agreement with the additional proviso.
Bank Committee: May 18th 1936
The Town Clerk submitted the following report as to restrictive covenants with respect to property No 829, Pershore Road, Selly Park:
14th May 1936
HP 18312: 829, Pershore Road, Selly Park
I have to report that on investigation of the title of the above property, it appears that the purchase is subject to certain restrictive covenants affecting the Selly Park Estate, contained in a Conveyance dated the 20th May 1864.
One of these covenants requires that every dwellinghouse erected on the Estate shall have attached to it at least a quarter of an acre of land.
The house which Mr McGee (the Borrower) is offering as security has recently been erected and occupies a site of 1024 square yards.
The land which is bound by the covenant is in immediate neighbourhood of houses known as "Selly Wick" and "Little Wick" the former being occupies by Mr R A Pinsent.
I am informed that an Association has been formed of residents on the Estate with the object of enforcing the covenants, and in the event of any action being taken in this particular case the Borrower would under his purchase Deed be liable without any indemnity from his Vendor. In these circumstances a doubt arises as to the wisdom of accepting the security, and I shall be glad to receive your Committee's instructions.
The purchase price of the property is £1250, and the Borrower has asked for
a loan of £900.
The Town Clerk submitted the following report as to an application for an advance on a new house in Hodge Hill Road, Ward End, upon which questions regarding charges had arisen:
18th May, 1936
New House,
Hodge Hill Road, Ward End.
Proposed advance to Miss Elsie Marian Wheeler.
I have to report that this property is held under an Underlease dated the 23rd October, 1925, by Mr Arthur Ernest Rymond of Four Oaks House, Walsall Road, Four Oaks, to Mr John Edwin Jones, the present Vendor. Such Underlease contains a covenant by the Underlessee to keep the Underelessor indemnified against all expenses and liabilities under (inter alia) the Private Street Works Act, 1892. This in my opinion is contradictory to, and in effect nullifies, the indemnity on the part of the Underlessor subsequently contained in the Underlease in respect of road making charges.
The proposed advance is conditional on the Borrower being indemnified in respect of road making charges. The Assignment by Mr Jones to the Borrower of the property includes the benefit of the Underlessor's covenant as to road making charges, but this, in my view, for the reasons stated above, does not give the Borrower sufficient protection against any claim in respect of such charges. I accordingly suggested to the Borrower's Solicitors, Messrs Goodway Parker & Co, who also act for the Vendor, that, in the circumstances, an indemnity should be given to the Borrower by the Vendor. This, however, he is unwilling to do. After communicating with the General Manager of the Bank I accordingly notified the Borrower's Solicitors that the Bank would have to withdraw the offer of an advance.
The Borrower's Solicitors have since been in communication with Messrs Hatwell Pritchett & Co, who act for Mr Rymond. Messrs Hatwell Pritchett & Co have informed them that Mr Rymond has contracted with Taralag Ltd for the making of the roads and that the builders' roads with services have already been made and paid for, and that only the surface and flagging remain to be done when the houses are completed. The Borrower's Solicitors have requested me to ascertain whether, in view of this fact, your Committee can see their way clear to proceed with the advance and I await the Committee's instructions on the point, and also as to whether I am to charge the Borrower with the legal costs incurred in connection with the matter in the event of the advance going off.
5674 RESOLVED:- That, subject to a satisfactory further report being obtained from Mr Frank Wilde with regard to the estimated amount of the charges to which the applicant would be liable, the Chairman be empowered to authorise the suitable advance to be made in this case, and that, in the circumstances, the Town Clerk be directed to dispense with the charging of any legal costs incurred in connection with the matter.