I welcome this amendment. The Master of the High Court and several senior High Court judges have expressed dismay at the cases where borrowers have not appeared or lodged a defence in respect of repossession orders. The Circuit Court is a more appropriate place to deal with this issue rather than the High Court.
The whole area, however, is something that the Minister and Government will have to tackle in the future. With the number of repossessions, this country will be in a difficult situation. Now that we are creating NAMA, I do not know what will happen to these properties when they are repossessed. What will the banks do with them? Once NAMA takes them over there will be empty houses with no one to buy them. The taxpayer will pay for the house that has been repossessed, creating a vicious circle. The matter has not been thought through. There is a huge difference between repossessing an investment opportunity that went wrong — in those circumstances, it is reasonable that those who lend money should seek repossession or the money back — and a person's home That is completely different and this House will have to deal with that matter.
If a person's home is repossessed, as distinct from an investment property, what happens to the family? They go on the housing list. There will be a ridiculous roundabout where a home is repossessed, the family signs on the local authority housing list, the local authority must find accommodation for them, they will be placed in rented accommodation before being allocated a dwelling and we will subsidise the rent and, in the meantime, the bank has repossessed the house which will lie vacant. The family becomes clients of the local authority which must secure rented accommodation, subsidising the rent that is being charged, and ultimately the person and his family might be rehoused by the local authority.
It would make more sense where it is clear that a person, because of extreme circumstances cannot afford to maintain repayments, for the local authority to take over the mortgage, with the title deeds being transferred to it, allowing the person to become a tenant and pay the appropriate rent. That would prevent the whole merry-go-round of repossession and houses lying vacant in the ownership of a financial institution that will be passed on to NAMA, which must then hold on to them until someone eventually might buy them.
This is not just an issue in terms of this legislation, although I appreciate the Department of Justice, Equality and Law Reform will not be involved in NAMA or the allocation of dwellings for homeless people. Transferring responsibility from the High Court to the Circuit Court, however, is only the beginning. A new way of thinking is needed to deal with this so that, instead of the court making the decision for repossession, there would be a connection between local authorities and the court to allow an arrangement to be made with the housing authority to let the individual and his family remain in the dwelling.
It is important that this matter be discussed. I ask the Minister, as a member of the Cabinet, to tell us in his reply whether the issue has been debated at Cabinet level. As the Minister has held many portfolios he is quite capable of understanding exactly what I am talking about. It is a real problem. As I said at the outset, if a person has bought different properties — apartments, houses or whatever — for the purpose of investment and has failed in his or her responsibility to make repayments, that is a different issue. We are talking about people's homes.
There is another aspect to this. It will not make much difference whether it is the High Court or the Circuit Court if the family becomes homeless and the responsibility falls on the State to find accommodation for them. The cost of all this to the taxpayer will be substantial. While I support the amendment being proposed by the Minister, which makes a lot of sense, there is another issue that should be discussed — although perhaps not in the context of this legislation — and which we as a society will have to come to terms with. The chances are that in many cases the houses that are repossessed will end up in the ownership of the State through NAMA. There will be a whole process of maintaining and looking after those houses. What will happen to them I do not know. I am sure nobody in this House at the moment knows either. There will be many boarded up, empty dwellings the length and breadth of the country if we allow this situation to continue. We must address a real problem: what do we do when people, due to loss of employment, find themselves genuinely unable to continue making repayments? Financial institutions will not hang around. We must find a solution.