The pioneer express. [volume] (Pembina, Dakota [N.D.]) 1883-1928, 1897-06-18
NEW MORTGAGE LAWS.
From the Northwes st Magazine.


The Legislature of the State of Wash
ington, largely controlled by the popu'-
list party, made new laws at its recent
session, concerning the collection of
mortgaged debts, which are interesting
to the general reader. The first law
abolished all provisions for deficiency
judgements; that is to say, when there is
foreclosure of a mortgage, in case the
sale of the mortgaged property does not
produce enough money to satisfy the
debt, the holder of the mortgage cannot
proceed against any other property held
by the debtor. This seems to be, on the
whole, fair to both parties. The money
loaner should be satisfied with the piece
ofproperty he accepted as full security
for his loan. He shonld be willing to
take his chances on getting his money
back, with interest, out Of that particu-
lar piece Of property. 1t is his business
to be careful not to loan too much
money on the security. a:shTo sollow
debtors with legal proceedings::for the
purpose of seeking out other property
not covered by mortgage seems OPP
pressive, and, at all events, is not in the
line ofpublic policy.
The other Washington statute is open
to serious objection. 1t provides that
under foreclosure proceedings on mort
gage, there shall be an appraisal of the
mortgaged property, the appraiser to be
named by the court, and THAT unless the
property brings 80 per cent of its APP
praised value at the sale, the sale shall
not be effective, and a new:board Of ap-
praisers shall be appointed at the next
term of court. 1t is assumed t.,at::..this
new board will make lower appraisal,
and that the process will be repeated I'M
til, finally, the property. can. be sold.
In the meantime, there will be long de-
lays. The appraisers will in most cases,
be neighbors of the debtor, holding prop
erty near his, and they will ot.be.willing
to name a low valuation, for ifear of de-
preciating the value of their own hold
ings.
The general effect of all statutes which
render the collection of debts difficult
and expensive is to increase the rate OF
interest and to diminish the amount Of
money which men;are willing to loan on
real estate. A Federal judge remarked
to the writer Of this article, recently, that
in Massachusetts the interest rategis, on
an average, lower than in any other state
in the union; yet Massachusetts has nc
usury law, and leaves the rate Of inter.
est open wholly to the contract between
the loaner and borrower. The general
result of this kind of legislation is to de-
feat its own purpose. 1t makes Interest
high and capitalists shy of loaning theil
money, unless it can be done on yer,
ample security. When people become
more enlightened as to their real inter
ests, all these laws will be cleaned of
the statute books and the example O
Massachusetts, will be followed in per
hitting the greatest freedom of contrac
in the loaning and borrowing of none,
and providing for the least expensiv,
and tine most efficient collection of debts
One thing may be said, however, in fav
or of the new Washington statute in re
lation to foreclosure; that is, that the Dor
rover is allowed to waive the benefit o
its provisions in his mortgage. 1t is SAT-
to say that the mortgage companies op
Grating in that state will be quick to TAX
advantage of this provision of the law.