Editorial: The unhappy mortgagee

Last updated 10:02 02/09/2013
James Dale Davidson

SEIZED BY THE BANK: This Wharekauhau home has been put up for mortgagee sale by Westpac after it was abandoned by its owner, US businessman and investment guru James Dale Davidson.

James Dale Davidson
GOOD TIMES OVER: James Dale Davidson enjoyed relaxing and dining at the lodge and shopping in Martinborough and Greytown.

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OPINION: Generally, it's not a good look for a politician to get hissy with someone who is losing his home to the bank.

But when Economic Development Minister Steven Joyce made his withering dismissal - "we like people to pay their mortgages" - his target was not the sort of guy who trudges into sight from a John Steinbeck novel or a Bruce Springsteen ballad.

James Dale Davidson is an investment guru whose abandoned Wharekauhau mansion is being sold by Westpac. He's insisting from abroad that only the insane would invest in this place.

The nation hasn't exactly erupted in a spasm of self- recrimination at his complaint of hostility towards rich foreigners such as he, when what we really should be doing is making our country a retirement haven.

He points out, in the belief it strengthens his argument, that he was able to make millions in Argentina, Peru and Brazil. Yet when he came here not only couldn't he seem to turn a profit, he lost millions.

Rightly or wrongly, those South American countries are not ones upon which we tend to model too many of our aspirations.

This must be the easiest rebuff that Mr Joyce has made in a long time. If anything it's a welcome look for a Government more vulnerable to being seen as a lapdog for foreign investors.

The minister was able to cite the World Bank, which is itself hardly a cuddly institution, ranking New Zealand the third-easiest country in which to do business, and to cite the likes of monumentally successful Hollywood director James Cameron, who has been investing here.

Mr Davidson was part of a group of investors who bought into the lodge and it seems his fortunes suffered from difficulties gaining resource consent for expansion, blocking much-needed international investment.

But a couple of other factors arose for which we our leaders probably couldn't be blamed; the global financial crisis and his own financially painful divorce.

Although he has funds in the United States, he points out it's more important to pay his children's private tuition than the bank. Hence the mansion, by now sadly run-down, coming up for sale.

Given that Mr Davidson is not only an investor but a publisher of investment advice, he has been taking a hiding from Kiwi commentators for what they detect as his own lack of nous.

So much, said one, for all those books preaching personal responsibility, preparing for the unexpected and living within your means.

Granted, in New Zealand we don't expect investment advisors to turn their backs on mortgages. However, it's perhaps worth remembering that with the law in the US, where he's from, it's far more common to walk away from a mortgage, but it attaches to the property, not the person. In the land of personal responsibility, the defaulter might lose the asset but the residual problem of the achingly unsatisfied mortgage becomes the lender's.

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- The Southland Times

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