I thank Deputy Michael McGrath for bringing forward this Bill, which gives us a chance to provide protection and to have a debate not just on the IBRC mortgage holders, but on the issue of mortgage arrears generally. The debate is timely given the latest publication from the Central Bank.
Like all my colleagues, I would prefer if we had a timescale for Committee and Report Stages of this Bill and for its implementation. The Government has a habit of accepting Second Stage Bills, but then they go to the great cupboard in the Cabinet sky where they await Committee Stage. This issue is urgent because we have the proposed sale of the IBRC book on 14 March. It is clear from the comments of the special liquidator last week that there is currently no legal protection for mortgage holders. It is clear also that the proposal of some sort of informal guarantee from those who may buy the loan book has no legal standing. It is clear too that those seeking the protection of this legislation are currently not protected and will not be unless the legislation is passed.
We do not claim this legislation is perfect. We do not have the resources the Government draftsmen would have. Given the urgency and need for protection, I would like an indication of publication of Government legislation. In a week where we have had no legislation in the House and when, I understand, no legislation is planned for next week - we will have another week of statements on how good the Government believes it is and on Teanga na Gaeilge for Seachtain na Gaeilge - there is no pressure on the legislative system. Therefore, the Government could, if it wished, pursue this legislation next week ahead of the final sale so as to provide protection. Whatever happens, what Deputy McGrath has done in introducing this Bill is beneficial and we should now be given a timescale for when the Government will see through this legislation.
There are many issues in regard to mortgage arrears. Today's publication from the Central Bank provides some good headlines in regard to mortgage accounts arrears falling for the second quarter. However, when we dig into the detail on that, the situation is not quite as rosy as it seems. Considerable challenges remain and we still had 136,564 - 17.9% - mortgage accounts in arrears at the end of quarter 3 of 2013. More importantly, the number of accounts in arrears for more than 720 days has increased by 1,755. This presents a long-term problem. David Hall, who has given so much time, effort and energy to this issue in recent years, stated in today's Irish Examiner that the mortgage arrears crisis is coming to a head. For people who are more than two years in arrears - some 33,500 mortgage accounts, including the extra 1,755 - this is coming to a head. Many of the mortgages in this group are on principal private homes. We cannot support a situation where there is ongoing acceptance of arrears that go over two years. To provide protection to these people and to give them some sort of guarantee about their homes, the Government must act. It must work with the Central Bank on the issue.
Deputy Dooley referred briefly to the pressure on these people. We all know people with mortgage arrears on their principal private residence, as they have come to our offices and clinics. We are aware of the pressure they are under to try to reach an accommodation and that they have few options if they decide to sell their houses. If they decide to go the route proposed by the Central Bank and sell their houses, they face particularly high council waiting lists. Also, the restrictions on rent supplement and allowances that have been introduced in the past few years have excluded many from those provisions. The latest restrictions involve people having to negotiate with their landlords to reduce their rents. This is happening at a time when in Dublin and other big population centres landlords are leaving rent levels to the market and people are being thrown out of their houses. The lack of new capital investment in social housing and in the voluntary housing organisations also exacerbates the situation. We need to focus on a resolution of the housing crisis generally. The mortgage arrears issue, the lack of social housing and the lack of opportunity for people who are looking to get on the housing ladder must all be taken into account.
The Central Bank seems to present slightly conflicting views in its surveys and results. On the one hand, it welcomes the fact the number of mortgage accounts for principal dwellings in arrears has fallen, but it acknowledges that many of those have gone into a resolution process. It goes on to say that of the total stock of restructured accounts at the end of December, some 54% were not in arrears. This suggests that 46% were in arrears and there is still an issue there. Some of these may refer to accounts that were in arrears prior to restructuring, where the arrears balance has not been eliminated and others to accounts that are still in arrears on a current restructuring arrangement. If the restructuring has not worked out, where does one go then? We cannot restructure a restructured account.
If we are to be honest about the state of our banks as the economy begins to grow again, we need to address this issue. It must not be given the kind of arms length treatment it is being given currently by the Government and the Central Bank. Such treatment is evident in the way this Bill had to be introduced to focus on this issue. We were being told everything would be fine and would be all right on the night and that whoever bought the loan book from IBRC would give guarantees. However, in an exchange at the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, Deputy McGrath found out from Kieran Wallace, the special liquidator, that these guarantees do not have any legal standing.
Deputy McGrath asked what status the guarantees had and whether Mr. Wallace could advise where it would be written into the sale process. Mr. Wallace responded that it was just a voluntary agreement and would not be written into a particular agreement. Deputy McGrath went on to ask whether it would be written down anywhere, and Mr. Wallace answered "No". When Deputy McGrath suggested it had zero legal standing, Mr. Wallace said that was correct.
This is not fair and is not good enough for those who, through no fault of their own, find their homes and lives are tied up in this process - in particular the 13,000 mortgage holders who had mortgages with Irish Nationwide, tied up with Anglo, who are being thrown into this mix. They entered into mortgages in good faith and made the same commitments the rest of us made with our mortgage holders. They are entitled to the same protection, but they have no protection at the moment. Perhaps the Minister will clarify in his response what is planned for these mortgage holders post 14 March.
These 13,000 people look at what is happening in the commercial sector and the work NAMA is doing in selling off the old Anglo loan book in that sector. There, they see that the State, through various banking organisations, is assisting some people to buy assets from NAMA, yet they are left without any protection at all. They see this inconsistency and ask what they have done to deserve this. Many other mortgage holders are also watching what is happening and wondering what protection is available to them legally once their mortgage arrears have gone beyond two years. They want to know what protection is available to them and whether the Central Bank is interested in getting a resolution that is fair to them.
We still have protests at auctions when family homes and principal private dwellings are being sold off because people are unprotected.
That is wrong in a country in which people have a strong relationship with their homes. That relationship is very unusual in the European context and difficult to explain to people outside the country, but it is real. People like to own their home and we have to get behind this.
Many in difficulty with their mortgage seek advice from organisations such as the Money Advice and Budgeting Service, MABS, which is struggling because of the pressure exerted by the financial disaster that has befallen many. We could get more resources for MABS to employ people to deal with its case load. In that way, some of the 13,000 who are on the books of Anglo Irish Bank or the restructured banks would have a forum in which professionals would not fleece them for advice and use their crisis to line their own pockets. MABS gives an honest service and assistance, but waiting lists around the country are so extensive that many will not use it. That is the first practical step to get people affected by this legislation back on the road.
When and if the Oireachtas Joint Committee on Finance, Public Expenditure and Reform holds the banking inquiry, it should consider protection for mortgage holders in the future. It should ensure that when the restructuring of the banking sector is complete and the banks are back in business, the situations that arose in the so-called boom will not occur again such as bidding wars between banks to get people in by offering 100% mortgages and another loan to cover stamp duty fees or clean out the house. That is what brought many people to the situation we are discussing. The role of the financial regulator during that time and what it did to try to stop the race to the bottom should be examined too. I hope the inquiry will have the opportunity and resources to consider how banks began to sell unsuitable products to many clients.
We have until 14 March. The Government intended to bring forward this legislation in 2015. It would be good if a legislative path were laid out for when the Minister intends to take the legislation on Committee and Report Stages and when the protection will be offered to the 13,000 people mentioned. Many speakers have suggested extra protections and this is the time to include them. Deputy Michael McGrath is not precious. If we can make improvements, let us make them, but let us aim to do it this side of the recess and not let it drag through the summer waiting on the voluntary code. There is no suggestion organisations that buy loan books to make a profit have a good nature. They are out to make a profit and serve a shareholder - there is nothing wrong with this, contrary to what some on this side of the House think - but our duty, as legislators, is to protect the legal interests of homeowners tied to this loan book and we have an opportunity to do so. I hope the Minister will outline some framework for legislation.