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Lethbridge Herald, The (Newspaper) - September 18, 1974, Lethbridge, Alberta District The LetKbridge Herald Local News Second Section LETHBRIDGE, ALBERTA, WEDNESDAY, SEPTEMBER 18, 1974 Pages 13-22 ,000 string on second mortgage trips city couple By JIM GRANT Herald Staff Writer Burdened with debt, a young Lethbridge couple thought they'd found a way out from under last January when they negotiated a second mortgage on their home. Today they feel they're victims of a legal ripoff. The couple discovered in July it would cost them more than to pay out a second mortgage on their house, obtained only six months earlier through a local mortgage rompany. A Herald check with the Securities Commis- sion of the Alberta attor- ney general's department found that the mortgage company acted within the law if it took the precaution to fully inform the couple of the financial details and early payment penalties of the mortgage agreement. But even if they were in- formed of some or all the costs involved, the couple, like most other people in such financial difficulty, likely were more interested in obtaining the funds than what it would cost thepi to pay out the mortgage before maturity. Only received However, less than six months after they obtained the mortgage to con- solidate their debts, the couple realized the mortgage only temporarily relieved their financial dif- ficulties and the only solu- tion to their problems was to sell their home. When they attempted to go ahead with sale of the home, they were informed it would cost to pay out the mortgage. That is an amount greater than what the cou- ple received from the mortgage company in mid- January despite a few monthly payments they made between February and June. The couple actually only received of the they borrowed in January because the mortgage company deducted in brokerage fees and in legal and other fees prior to forwarding a cheque for the loan. Thenx when the couple went to pay out the mortgage, the company charged them a three- month prepayment penalty of a discharge fee of in interest and a one-year lock-in penalty of A local lawyer has taken the couple's case to the federal and provincial government's consumer af- fairs departments, sug- gesting if the demands of the mortgage company are lawful, then legislative ac- tion should be considered to provide the consumer with some protection. Costs must be explained The federal department informed him it was investigating the case while Bob Dowling, Alberta minister of con- sumer affairs, said he passed the case to the Securities Commission general's department because it was in its jurisdiction. The commission has since informed the lawyer it is investigating the case. However, in a telephone interview from Edmonton, Paul F. Newhouse, registrar with the Securities Commission, said the commission is not in a position to alter civil contracts. "We can only see to it that he (the consumer) is aware of what the mortgage will cost he claimed. The mortgage companies must verbally explain all the details of the mortgage outlining all costs involved and give the borrower 24 hours to study the mortgage form, Mr. Newhouse says. He says the commission has received several com- plaints about finance com- panies and companies specializing in second mortgages in the past and still receives one or two complaints from con- sumers each month. Few 'willing to help9 But. he continues, the same companies that have been damned by some peo- ple are now the only com- panies willing "to help people" who need financial assistance. Many mortgage com- panies are not lending money now and those that are. are only loaning money to people who are good credit risks. "The ones who get in- volved with these people (second mortgage com- panies) are poor credit risks or they can't manage their personal affairs and often need money because they can't resist buying." Mr. Newhouse claims. There are few agencies that are equipped to warn second mortgage seekers of the predicament they may encounter after they sign the dotted line. Those thinking of obtain- ing a second mortgage can obtain information about second mortgages from the Alberta Better Business Bureau but the information is vague and the best ad- vice offered is "contact a lawyer to see you are protected." Walter Matthews. Cal- gary bureau represen- tative, says consumers may find it will cost them considerably less to obtain a lawyer than enter an agreement unaware of the costs involved. Complaints about second mortgage companies received by the bureau are simply forwarded to the Securities Commission in Edmonton. Such action is of little consolation to consumers like the Lethbridge couple mentioned above, who entered a second mortgage agreement expecting to pay an interest rate of 18 per cent. Instead they calculate the total cost for the use of the mortgage money at over 48 per cent. Sparks flying at election opener 'Do PHIL ILLINGWORTH photos 'Sure looks hard9 '__ __ last I can work alone9 By ANDY OGLE Herald Staff Writer Make no mistake this is not going to be a quiet civic election campaign. Tuesday's forum, sponsored by the Knights of Columbus, produced sparks over several issues that are likely to be raised time and time again before Oct. 16. Charges and counter- charges were hurled about and emotions ran high at times both through the crowd and among the 13 aldermanic hopefuls on stage. More than 100 people show- ed an interest in civic affairs by coming to the Polish Hall at p.m. for the forum. The five incumbents on the platform declared early for the most part that they would prefer not to have to run on council's record: on their decisions of the last three years. But it became obvious that was a forlorn hope. In the question period following the candidates' speeches, a brief verbal battle ensued between incumbent Deputy Mayor Vaughan Hembroff and candidate Hal Hoffman over the power plant issue. That debate eventually drew most of the incumbents in. They were also called on to defend council's actions in the west side and downtown redevelopment projects. But the issue that seemed to really raise temperatures in the hall was council's decision against a pedestrian overpass at the Mayor Magrath Drive. and 5th Avenue intersection. It started out innocently enough when incumbent alderman Steve Kotch was asked to explain why cpuncil had turned the overpass down last spring. are other intersec- tions that are just as dangerous and I ask where do you draw the said Aid. Kotch. we start building over- passes all over the city wherever school children cross intersections? If we're going to build one there, then I want an overpass where my children cross too." When the questioner in the audience said he understood there were 3.000 children in the general area of the 5th Avenue intersection. Aid. Kotch said that if it was general knowledge there were that many children there it would seem logical that drivers would be more careful there than in other less busy crossing areas. But when the man in the audience continued to press the issue. Aid. Kotch told him: getting emotional. I'm not up here tonight to give' you a lesson in understan- ding." This prompted candidate Tony Tobin to jump up and term that remark disrepect- ful. "You've just seen an exam- ple of why I'm running for alderman." he told the crowd. "When social problems arise, the position of council is it's vour own damn fault. and you're stupid if you don't understand. "The problems of single parents are their own faults because they split up, it's the drunken Indian's own fault that he's drunk, and on the school crossing, they tell you that you don't understand it. That's disrespectful." "It's time we put people said Mr. Tobin who had earlier called the city's record in meeting social needs the worst in the province. Bui his criticism drew a rebuttal from Aid. Vera Ferguson who said she resented remarks that council incumbents don't care about people. "Anyone who's sat on coun- cil for six years and taken calls in the middle of the night and the early hours of the morning cares about she said. "The very fact that we are here again willing to give of our time shows we she said. She added that no one on council was entirely happy at not being able to come up with a solution to the crossing problem. "The report we had in- dicated there could be an even greater danger with an over- pass." she said. "If I thought an overpass would solve the problem, it would not be a question of money, but it hasn't been demonstrated this is the solution." The power plant debate, which threatened to become a mini-re-run of the long process that led to the council decision to sell the plant to Calgary Power, was touched off by a remark by Mr. Hoffman that past councils were negligent in not keeping up the city's investment in the plant. Mr. Hembroff defended the sale decision on the basis that to do otherwise would have seen property taxes skyrocket. He admitted that it was an unpopular decision but said it showed why it's necessary to have independent people with no ties to political or other groups on council. "I was sad to see the plant go, but you need people who are going to look at things ob- jectively, not with a political viewpoint." he said. Several other candidates including Al Ferenz. John Gogo. Mr. Tobin. and Bob Tarleck said they were un- happy with the way council handled the power plant issue, saying it should have gone to a plebiscite. Mr. Ferenz suggested the city didn't get as much as it should have from Calgary Power for the plant. "If you sell an asset, you try and get as much for it as you can." he said. "You don't give it away." Mrs. Ferguson, however, called discussion of the power plant issue "flogging a dead horse. "The decision's been made." she said. "I can assure you long, hard Board supports director The Rehabilitation Society of Lethbridge. will support its executive director, a member of the society's board of direc- tors said today. Don Dalke told The Herald the laying off of a workshop staff member had been dis- cussed Tuesday at a directors" meeting. Bui no statement would be made unless someone makes an issue of it. he said. and that would be a fairly flat statement of support for the executive director." hours of study and negotiation went into she added. "If we had continued to keep the power plant there would have come a point where Calgary Power would not have needed it and wouldn't have given us anything for it. "We negotiated with Calgary Power to the nth degree and felt we came as close as we could to the amount we set ourselves." "You'll get no apologies from me on the fact we sold the power plant." Grandstand plans held up A second plan for a grands- tand at the Exhibition Grounds should be in the hands of the Lethbridge and District Exhibition Associa- tion this week to allow direc- tors a choice of structures. A decision on grandstand design and cost was postponed for the second meeting in a row when the board of direc- tors met Tuesday because the architect's plans were not available. Andy Andrews, manager of the association, said this morning it appears the architect firm preparing the second set of plans is "not anxious for business." Other business handled at the evening meeting involved' reviewing the results of the Whoop-Up Days summer fair. Full results of the fair will be released by the association when audited statements are prepared for the general meeting in November. Exhibition Association President Fred Pritchard said this morning he expects the building committee to'meet this week to'discuss two sets of plans for the grandstand, although one plan is only at the engineer's concept stage. Mr. Pritchard said the board was approached by a se- cond firm asking if it could draw up a set of plans for the grandstand. Because the grandstand can be handled in various ways, the board decided to seek the second plans. Mr. Pritchard said the board is also looking for a lower price than was suggested by the first designer. Mr. Andrews said plans for the gas light park at the Ex- hibition Grounds are progressing. Aid. Bill Kergan. city coun- cil representative on the ex- hibition association board of directors, said the site plans have to be presented to city council soon to collect the S4.- 800 allocated for drainage. City council voted approval of to supply drainage pipe and work to the area. Mr. Kergan said Lethbridge Sicks Brewery and Canadian Western Natural Gas Co. Ltd. arc ready to withdraw their financial support of the pro- ject if plans are not ready- soon. Mr. Kcrgan was unable to attend the directors meeting because he was attending a political forum to contest his scat on council. Incumbent aldermen pressed about land deals The question of city council's "loss" on the sale of down- town properly to Woodward's Stores Ltd. surfaced for the second time in two nights at an election forum Tuesday. It was raised by council candidate Hal Hoffman, echoing remarks made Monday after the CGA nomination meeting by another can- didate. Stan Klassen. "I'm glad to see Woodward's com- ing to the city." said Mr. Hoffman, tail I don't see why the citizens should have to subsidize a big outfit like it." The deal was later defended bv in- cumbent Deputy Mayor Vaaghan Hembroff who said the city actually spent million on the downtown redevelopment scheme. It was the city's contribution in the partnership with the provincial government which will spend between million and million and Woodward's which is spending abmit million, Mr. Hembroff said. "Both the province and Woodward's paid what we con- sidered fair market value for Jhe land." he said. "It likely cost Uie million hut it will mean an annual lax income of he said. "How long willjt Sake to recover Jhe money we didn't give away or squander, but he asked. The city's development of West Ix-Jhbridge and it's effects on east- sJde lot prices also was raised Tues- day wilh one person in the audience suggesting council's decision to sale of east-side land to development of the west side resulted in higher lot prices in Kast Ijclhbridge. But incumbent Aid. Cam Barnes said it was private developers, who hold most of the land on the east side: not the city, who forced lol prices Up. "We're keeping control of West Lelhbridgc so the average citizen can still buy a lot there." he said. Incumbent Aid. Vera Ferguson added that land on the easJ side began increasing in price long before council adopted its land (reeze policy. "Lots on the west side are still be- ing sold at the same price." she said, adding that Jhe city has helped to keep lot prices down by owning land on the west side. Candidate Bob Tarleck told Jhe crowd, however. JhaJ one reason developers expect higher prices on Jhe east side is because of restric- tions placed on the number of lots builders could build op m West 5-t'iisbndgc. and restrictions in Jhe rode Jhere. Another candidate. John Gogo said he believes private developers should have been allowed lo develop Wesl "But that's hindsight and the city tes sovera' million dollars invested in the west side and Jhe bes! thing lo do now is to make it he said. United Way on its way Did yon know There are H5 boys and girls, aged 13 to 18 years, belonging to the Navy in Lethbridge? Support the Navy League through the United Way 1974 campaign results to date: ProJessional NaJional firms Residential lirms 790.000 750.000 TOO.OOO 50.000 Education rivar employees Provincial employees R-dcral employees Banks and financial Heal es1aJo firms Agency staffs rw bd. Objocljve Unibed way ;