Mortgage Arrears: Motion [Private Members]

I move:

"That Dáil Éireann:

notes the continuing difficulties faced by tens of thousands of homeowners in mortgage arrears due to loss of employment and income as a result of the deep recession in the Irish economy from 2008 onwards;

further notes that:

— the existing Code of Conduct on Mortgage Arrears (CCMA), whilst providing comprehensive instructions for creditors dealing with those in arrears, is not fit for purpose and does not provide necessary and important consumer protections; and

— there is no provision within the Code for lenders and mortgage servers to be mandated to provide necessary solutions for those in arrears which would prioritise safeguarding the family home; in fact lenders have the ability to choose which solutions they like and ignore the ones that they do not; and

calls on the Minister for Finance to amend the CCMA to mandate all creditors and mortgage servers operating in the State, including lenders or mortgage servers not registered within the State, to offer one of the following solutions to those in mortgage arrears:

— a split mortgage with no interest payable on the warehoused portion;

— participation in a reformed mortgage-to-rent scheme; or

— certainty for any borrower in negative equity selling or surrendering a property as to how the residual debt will be dealt with prior to the sale or surrender of the property."

The reason behind the motion is very simple. There is a crisis. It may have gone off the radar for the media and the Government but it has not gone away. A total of 95,000 families are struggling to hold on to their homes. This is the number of people with mortgage arrears of over 90 days and excludes buy-to-let properties. I note that the Government amendment makes a point about the reduction in the numbers of those with mortgage arrears of more than 90 days but the long-term arrears figures went up significantly. This category has increased quarter upon quarter every quarter and now contains 37,000 people, each with an average arrears of €49,000. The point the Government is making is just throwing sand in people's eyes to make them think that the situation is being resolved or is moving along.

According to information given to the Oireachtas Committee on Finance, Public Expenditure and Reform by the banks in April 2014, legal processes have begun or were being considered by the various banks in over 22,000 cases. This could mean that over 20,000 people, most of whom have families, could lose their homes over the next year to 18 months. That is the reality. I do not know if the Minister of State heard the point I was making. This could mean that over 20,000 people, most of whom have families, could lose their homes over the next year to 18 months.

When the code of conduct was introduced, the Minister for Finance stated that:

The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) places an onus on the banks, in respect of a co-operating borrower, to explore all the options for an alternative repayment arrangement offered by the lender to address a primary dwelling mortgage difficulty before any legal action is considered.

We should note that the statement says it puts an onus on the banks to explore all the options before legal action is considered. It does nothing of the sort. Lenders are choosing which options they may or may not offer and in thousands of cases, are offering nothing except voluntary surrender or repossession. There is no onus on them and there are no sanctions under the CCMA.

I will cite two examples of people with difficulty out of the many cases my office has dealt with over the past three years. The first concerns a family in Drimnagh composed of a couple in their thirties with two young children. The couple had a small business that went under in the economic crash. They are eligible for the mortgage-to-rent scheme in terms of the value of their house and their level of income. Dublin City Council has confirmed that they are eligible for social housing. The lender has refused to put them forward for the mortgage-to-rent scheme and instead has brought them before the courts seeking repossession. With the assistance of the Irish Mortgage Holders Organisation, it was possible to arrange for a barrister to represent the family. Working pro bono, the barrister has put it to the judge that a repossession should not be granted when there is a viable alternative which the lender chooses not to operate. There is a series of lenders who refused to operate the mortgage-to-rent scheme.

Only 38 applications to the scheme have reached a successful conclusion. It is not fit for purpose. The scheme needs to be reformed. It is too cumbersome, it takes too long to conclude a deal and it needs far more finance from the Department of the Environment, Community and Local Government but above all, it needs to be made legally enforceable on lenders where it is a suitable solution.

The second case I want to bring to the attention of the Government is that of a woman in Walkinstown. Her relationship has ended and her ex-partner lives outside the State and makes no contribution to the mortgage. She lost her job in the crash and is paying €900 to Bank of Ireland. A total of €600 of that amount is paid by the State through mortgage support. One would think that someone paying €900 per month could get some sort of an offer from the bank. All she has received is a demand for voluntary surrender and the threat of repossession. The bank is bringing her to court shortly. The option of a split mortgage with zero interest on a parked amount would give this person a chance of holding on to her home until her situation improved. Again, such an option should be compulsory where it is suitable.

There should be certainty about how residual debt is dealt with for those who decide that it is simply too much of a struggle to keep their home and opt for voluntary surrender or letting the bank repossess. It should not be up to the bank to offer some people write down or write off but not offer it to others.

The commitment to legislation where mortgages are sold to unregulated entities is meaningless when the Central Bank code has no teeth. We must move to a situation whereby all lenders or mortgage services operating are subject to a code of conduct on arrears which has real teeth. That means legislation to make lenders or mortgage services offer at least the options outlined in this motion before they can move to repossession and bring people to court.

The motion is very specific. It states that while the existing code of conduct on mortgage arrears provides comprehensive instructions for creditors dealing with those in arrears, it is not fit for purpose and does not provide necessary and important consumer protections. There is no provision within the code for lenders and mortgage services to be mandated to provide necessary solutions for those in arrears which would prioritise safeguarding the family home. In fact, lenders have the ability to choose which solutions they like and ignore the ones they do not like. That is a fact and nobody can say anything different. That is the reality for thousands of families who are facing the distressing situation of possibly losing their homes.

I call on the Minister for Finance to amend the CCMA to mandate all creditors and mortgage services operating in the State, including lenders or mortgage services that are not registered within the State, to offer one of the following solutions to those in mortgage arrears: a split mortgage with no interest payable on the warehouse portion, participation in a reformed mortgage-to-rent scheme, or certainty for any borrower in negative equity selling or surrendering a property as to how the residual debt will be dealt with prior to the sale or surrender of the property.

I and many other Deputies have dealt with many families who are facing the threat of losing their homes, who are waiting months and who are hoping that the banks will deal directly with them. We know the Irish Mortgage Holders Organisation has made an agreement with Allied Irish Banks which has worked reasonably successfully. Representatives from the organisation were on the radio today and spoke about 1,300 deals they made with the bank to enable people to remain in their homes. There are a further 170 cases with AIB and the organisation is also dealing with another 150 cases itself. Due to the fact that a structure has been put in place, that AIB is paying for the Irish Mortgage Holders Organisation to deliver this service and that the organisation is able to make a deal directly with AIB, it has been more successful than what has happened in respect of all the other banks. I am talking about the five major banks and other mortgage lenders that were in the market several years ago and have sold most of their loans to the banks.

It is important that the Government grasps this issue. There was a revision in 2013 but it was not robust enough and it failed to force the banks to offer these three options to mortgage holders. I have outlined two cases with which I am involved but I am sure many Deputies can provide similar examples. The intention of the motion is to ensure people are not left in limbo while they attempt to deal with banks. Many people are afraid to admit they are in arrears. By failing to make the banks offer these options, this country and the Government are letting these people down. The banks are being left off the hook and they are able to dictate the pace or tell a family it is going to repossess their home without offering an alternative. In the case of the woman from Walkinstown, it is no accident that her house is no longer in negative equity. The banks have moved quickly to take her home because they can make money on it. The woman is left without a roof over her head even though she could make provisions to keep her home and continue to live with her family and all the amenities to which she has become used.

When it comes to the mortgage arrears resolution process, MARP, the banks are taking the proverbial. MARP was supposed to achieve two key objectives, namely, allow people in arrears to nominate a third party to help them deal with the banks and get the banks to train dedicated staff who could deal with people in huge distress due to mortgage arrears. Instead we have glorified call centres staffed by young people whose training consists of filling out standard financial statements and little else. All of the banks and lenders operate a conscious policy that the people who make decisions on mortgage arrears should under no circumstances come face to face with the people and families who will be affected by these hard nosed decisions. We have observed this in our dealings with the banks. Several years ago we were able to meet the people who made the decisions but it has now become impossible to do more than contact a call centre. The staff of these centres are not properly trained, despite the agreement under MARP that banks would invest in training their staff to deal with mortgage holders face to face. Third party nominees increasingly find themselves dealing with call centres and speaking to a different person every time they call. It is unacceptable that three years into the process the banks have not yet trained their staff or put the right people in place. This is leaving people in a vulnerable position.

I ask the Government to take this motion on board. It has been discussed in the Joint Committee on Finance, Public Expenditure and Reform. The Irish Mortgage Holders Association has also encountered the issues I have outlined and, other than AIB, it is finding it increasingly difficult to deal with banks. People are being forced into the courts unnecessarily. They should not have to go to court when there are viable solutions. This motion has not been tabled for the sake of it or as an airy fairy idea. It is a reality for the many people who have been affected by the mortgage crisis. The crisis has not gone away. Thousands of families are affected by it. We should revisit the issues every couple of months to assess how they have progressed.

The situation facing people in mortgage arrears and the housing crisis are the two burning issues that should have been addressed by this Government. Instead of this, however, the EU, the troika and the code of conduct on mortgage arrears put pressure on the banks to resolve mortgage arrears, which effectively means repossessing homes. I am seeing the effects of that policy in my own area in terms of people being made homeless and homes being repossessed.

We need more radical reform than what is called for in the motion, which does not include the vital option of a write-down on all mortgages in negative equity. We should not be outlining only three options for the banks because it is essential for society that we write-down all mortgages in negative equity. There is no other solution to the current crisis and it is something for which the Anti-Austerity Alliance is campaigning. The idea of a mortgage write-down has been dismissed by the Government based on the question of moral hazard and undeserving recipients. However, it is necessary in order to take the albatross of debt from people's necks and to free up millions of euro to spend in the real economy. Many of the people carrying the heaviest burdens also face huge child care costs and other expenses which add to the depression in the economy.

A mortgage write-down would solve the problem of negative equity for those who bought at the height of speculative boom caused by the banks and some of the parties in this Chamber and stoked by the media. How are these people to blame for buying overpriced houses when they had no other means of getting a roof over their heads? They are not to blame, they are the victims of speculation and profiteering in the housing market over a period of 15 years. This motion would split their mortgages without tackling the root cause of the crisis. The people who bought houses at hugely inflated prices were coerced into this situation and it is not their fault. The banks and developers have been bailed out at enormous cost by this Government and the previous regime while ordinary people have been left struggling.

How much would a mortgage write-down cost? Various estimates have been produced by economists and the Department of Finance. One estimate is that it would cost €14 billion but that includes both owner occupied and buy-to-let properties. Given that an argument can be made not to include buy-to-let properties in a write-down, the final cost would be €7 billion over a period of 25 or 30 years. That is not a huge cost. More recently, it was estimated that the cost would be €18 billion, or €9 billion for mortgages on principle homes. That is not a huge cost for the banks but it is a cost that the banks rather than the taxpayer should pay. Apart from helping home owners to reduce their mortgages and repayments, a write-down would create considerable domestic demand.

I obtained figures from the Central Bank on warehousing and restructuring. The banks are restructuring mortgages in many cases but 20% of split or restructured mortgages are continuing to fail.

That represents a significant number of people. We are saying we will leave the banks in control, make people continue to pay and make their children pay in future. What will happen when interest rates go back up and people cannot keep to the commitments that have been teased out with the banks? It is a large figure because while the number of people in arrears is declining, the number of people with long-term arrears is increasing. The Central Bank stated in September 2014 that the decline in arrears over 90 days masked a continuing increase in very long-term arrears. It added that accounts in arrears over 720 days had increased by 5% during the second quarter and now accounted for almost 5% of all mortgage accounts. It is a very significant proportion and indicates that the restructuring deals are simply not working.

The only way a write-down can be implemented is to nationalise the banks and take them into public ownership to run them in the interests of ordinary people - of working class people - and not in the interests of the establishment. It is the only way to plan for society's needs and to take this yoke from people's necks. A write-down is the most basic measure to call for by anyone on the left, not split mortgages and deals which are, in essence, liberal capitalist demands.

I am grateful for the opportunity to speak to this important motion on the issue of the difficulties faced by thousands of family home owners in mortgage arrears due to the loss of employment and income as a result of the recession in the economy. I welcome the debate and commend my colleague, Deputy Joan Collins, for bringing forward the motion to highlight the issue and put forward sensible solutions to this urgent matter. I urge the Minister to take heed of some of the comments being put forward by my colleagues.

I challenge the Government and other political parties which seemed to spend a great deal of time in the last week attacking Independent Deputies. Some people seem to be suffering from independentitis. In particular, I refer to the former Minister, Deputy Pat Rabbitte, who is proved wrong by tonight's motion. Here we are putting forward positive and constructive proposals to deal with the very important matter of mortgage arrears. If the Government is really serious about reform, change and a democratic revolution, it will support the motion which puts forward sensible and constructive policies. It will be time tomorrow night at 9 p.m. to put up or shut up. We have had enough talk and incompetent leadership but above all we have had enough of delays for families in mortgage distress. It is important to make that point.

Let us deal with the real issues and proposals in tonight's motion. The existing code of conduct on mortgage arrears, or CCMA, whilst providing comprehensive instructions for creditors dealing with those in arrears, is not fit for purpose and does not provide necessary and important consumer protections. There is no provision within the code for lenders and mortgage servers to be mandated to provide necessary solutions for those in arrears which would prioritise safeguarding the family home. In fact, lenders have the ability to choose which solutions they like and ignore the ones that they do not. I agree therefore with the motion's call on the Minister for Finance to amend the CCMA to mandate all creditors and mortgage servers operating in the State, including lenders or mortgage servers not registered within the State, to offer one of the following solutions to those in mortgage arrears - a split mortgage with no interest payable on the warehoused portion; participation in a reformed mortgage-to-rent scheme; or certainty for any borrower in negative equity selling or surrendering a property as to how the residual debt will be dealt with prior to the sale or surrender of the property. These are the proposals we put forward tonight and they are also solutions. It is up to the Minister to look at them.

It is important to remind ourselves in discussing these issues that last week we had a great deal of talk about how we had just had the last of the austerity budgets. If one says that to the unemployed, disabled, lower-paid or those in mortgage arrears, they will say it must be a joke. The sad reality for them is horrific. Let us look at how these families were treated in the budget. We talk about equality and a progressive taxation system and we have had that debate in recent days over the water charges. Budget 2015 widened the rich-poor gap by €499 a year. It gave a 99 cent increase per week to an unemployed single person while providing €14.30 per week to a single person earning €75,000. This is what we are dealing with. In the case of couples, the unemployed got €1.50 per week, which is €78.52 per year extra, while a couple with two earners on €125,000 will receive an extra €23.57 per week, or €1,225 per year. That is what these families have to deal with and it is a disgrace. The budget does not reverse the situation and it does not prioritise people. It is a fourth regressive budget. Couples like those who are the subject of the motion with one income who are on €25,000 per year will be €3.34 per week better off while those on €50,000 per year will be €8.74 per week better off. Couples on two incomes coming to €25,000 per year will be €5.31 per week better off while those on €50,000 per year will be better off by €6.63 per week. I am pointing out the gaps.

I welcome the debate and the motion but it is important to dig deeper into the homes of the people we are discussing. We have seen 729 children in almost 400 families in Dublin alone lose the roofs over their heads this year. We also have the sad situation of 28.6% children living in poverty in the State, which is an increase from 18% in 2008. I emphasise that figure of 28.6%. I commend Deputy Joan Collins on an excellent motion and urge the Minister to listen. I urge all Deputies to support the proposals tomorrow night.

Deputy Michael Fitzmaurice proposes to share his time with Deputy Peter Mathews. Is that agreed? Agreed.

I welcome the motion and the debate. There is a major problem nationally of people having difficulties with mortgages and banks failing to address the situation. We see it right around the country even when people make an effort to go to the bank to resolve things. Even if there is a middle person, there is real pressure on the homeowner trying to resolve the issue, but the banks go in with two sides to their story. The banks can listen or walk away. This situation cannot continue. I have seen instances including one close to my home where a family was put out of their home by a bank. The Department of Social Protection had to provide funding to the family to rent a house week by week. Some two to three months later when the house from which they were evicted was sold, I calculated that it could have been paid for with what the Department would provide in payments over four to five years. This is the tragedy that is happening nationally. I have seen houses sold by banks for €20,000 and €30,000 which is the equivalent of social welfare payments of €100 or €120 per week over four or five years.

One has to look at what the people have done for the banks. They bailed out the banking system to the tune of €64 billion. When it comes to dealing with those in difficulties - those who saved them - the banks now walk all over them. The 20% deposit requirement for home buyers who want to take out a mortgage will be difficult to meet in many parts of the country. This figure needs to be brought down to at least 10% to allow young people back into the property market. We need to ensure that in Dublin and other places where house prices are crawling up again a property bubble does not recur and that we will not be back at square one where we were several years ago.

Once the banks had been bailed out, they decided to desert smaller towns, leaving people having to travel up to 20 miles to conduct their banking. The only financial institutions that took up the slack were credit unions, the small people’s bank. They have a lot of money in different parts of the country which they cannot lend for the simple reason that when they lodge moneys in the main banks, they are charged a rate of 0.1%, which is a total disgrace. The Central Bank has introduced a massive amount of regulations for them, some of which needs to be relaxed. While I accept that there was under-regulation in the banking sector during the years, sadly we have moved to the other extreme, as is always the case in this country, with no in-between.

I hope the Government will take the motion on board to make the banks realise that they must face up to matters, sooner or later, and that a debt should not follow a person. They will not tell those who are trying to sell houses if they will come after them. I hope this matter will be addressed, too.

I thank Deputy Michael Fitzmaurice for sharing his time with me.

This is a timely Private Members’ motion because it addresses problems that are not going away. The mortgage and housing crises are embedded in society and need to be addressed. The boards of the two main banks, AIB and Bank of Ireland, and the third bank, Ulster Bank, are actually remote from the realities of life for the households for which they extended a credit-pyramid bubble for over seven years. It was disgraceful the way in which their boards adopted a policy of balance sheet expansion that brought the size of the domestic banking sector from three to over five times the level of national income. The size of banking system in the United States is only a little over GDP, gross domestic product. What was allowed to happen here as matter of policy was appalling.

Households continue to suffer. As Deputy Joan Collins pointed out, bank call centres are, pathetically, manned by people who are not experienced in looking at the recoverable and realisable amounts of mortgage lending which was part of the credit-pyramid bubble. There should be a bespoke, professional writing-down of balances to recoverable amounts, but this is not happening. I have first-hand experience of professionally advising people in this regard on a pro bono basis. The resistance by the banks is disgraceful. It was an illusion that someone like Wilbur Ross was coming to support and strengthen half of the banking system in the form of his investment in Bank of Ireland. It was pathetic to allow him to invest €290 million in the bank as he took €500 million in profit out of it. He was not interested in the economy or mortgage loans in the bank.

I am afraid I must ask the Deputy to conclude.

That is only a sample of what I wanted to say.

I compliment Deputy Joan Collins on proposing this excellent and timely Private Members’ motion. I thank her and Deputy Finian McGrath for giving me some time to address it.

While I agree with most speakers, I do not agree with Deputy Ruth Coppinger. We have to be responsible in this matter. The motion is measured and responsible and I hope the Minister of State, Deputy Simon Harris, will listen as so far the Government has not done so. I voted in favour of the infamous bank guarantee - my biggest political mistake with which I have to live. We were fooled and lied to by the banks. The Minister for Finance at the time passed the message on to us that there would be no money in bank machines - no money to pay for anything - if it was not introduced. Where were all of the senior officials in the Department of Finance, the advisers and all those supposed to know then? We have been paying the price ever since.

We bailed out the banks, but they are now giving the two fingers every hour of every day to every person, be they in business or mortgage arrears. The Government is, however, unable and unwilling to deal with the banks. I have raised the matter of the carry-on of the banks with the Taoiseach and the Minister for Finance on the Order of Business and other occasions dozens of times, as well as the fact that the heads of a Central Bank consolidation Bill have not been prepared to bring the outlandish behaviour of the banks and the National Asset Management Agency, NAMA, under control. According to the Central Bank’s figures, in the second quarter of 2014, 90,343 mortgages on primary family dwellings - homes, not buy-to-lets - were seriously in arrears. Up to 31,749 mortgages on buy-to-let properties were in arrears for 90 days or more. These two figures account for almost 33% of all mortgages. There is a tsunami coming down the line, while all the banks want are tidy books to show that they are up and running and doing business for the European stress tests. They are not, however, doing business with farmers or those involved in small businesses.

One has to deal with different personnel in the banks, but they are often unreasonable. I dealt with the case of a family in my office last week who were refused a mortgage by AIB because the husband had missed a €7 payment on a credit card bill. Today, €7 would not even buy 20 fags. Thankfully, in the end Bank of Ireland gave him a mortgage. The banks are looking for excuses to kill the bit of spirit and initiative in people and families who want to take out a mortgage to buy a home, settle down, rear a family and provide for themselves. They are being crucified by the Government and the Central Bank because of the lack of legislation. I compliment the Land League and other groups which represent families in mortgage distress and are trying to prevent homes from being repossessed. As Deputy Michael Fitzmaurice said, the mess of repossession has to be cleaned up by the Department of Social Protection and others. Many couples took out starter mortgages several years ago and now, after having children, wish to move to family-sized accommodation, but they are being prevented from doing so because of the lack of mobility in the employment market. Have we looked at the social consequences of this and the indelible mark it will leave on people for generations?

Some of the banks are returning to profitability and paying their way. However, we bailed out the banks and it is time there was a quid pro quo. It is time they had some understanding and respect for taxpayers who have suffered so much. That is why we saw so many out marching on Saturday and it is not just about Irish Water. Many people I know will pay for water if the issue is handled properly but not by a quango. So much has been taken from the people; they have been kicked in the teeth too many times. The spirit of the people has been resilient to withstand all of this. Will the Government listen and introduce some legislation to deal with rogue banks and bankers? We have a sham of a banking inquiry several years after the introduction of the bank guarantee.

The Government is more interested in dealing with the consequences for the next general election than it is in dealing with people's misery. Such people want to do a deal with the bank. They are not running away or expecting the State to pick up their mortgage, but they do expect to be dealt with fairly. They should not be subject to a penal rate of interest or threatening and intimidatory phone calls night and day. They then face the daunting prospect of going to court.

I was shocked to note recently that in courts around the country the Garda Síochána was mobilised to stop lay-people attending court cases as helpers or advisers for these organisations. They were not causing trouble or disrupting the court, but were there because such people could not afford legal representation. They had lay-people willing to help them but security staff were not allowing them into court. We cannot do this to our people. It is time the Government recognised that. It is time it woke up and smelled the coffee.

I call the Minister of State, Deputy Simon Harris, who is sharing time with Deputy Tom Barry. Is that agreed? Agreed.

I move amendment No. 1:

To delete all words after “Dáil Éireann” and substitute the following:

“acknowledges that the Government inherited a severe mortgage arrears crisis from the previous Government;

accepts that the mortgage problem is a significant economic and social challenge for the State and that the Government is aware of the difficulties some homeowners are facing in meeting their mortgage commitments;

notes that the Government published the Report of the Inter-Departmental Mortgage Arrears Working Group in October 2011 and that the key recommendations of that Report have been adopted by Government as the most appropriate framework to address this major problem;

recognises that the Central Bank of Ireland’s interaction with mortgage lenders is key to addressing mortgage arrears and in particular to ensure that, where appropriate, lenders put more long-term and sustainable solutions in place for their customers in mortgage difficulty;

notes that:

— the Central Bank of Ireland has set performance targets for the six main lenders requiring them to ‘propose’ sustainable solutions to 85 per cent of their mortgages in arrears of greater than 90 days by the end of the year and to ‘conclude’ solutions with 45 per cent;

— the Central Bank of Ireland’s Code of Conduct on Mortgage Arrears sets out requirements for mortgage lenders when dealing with borrowers facing or in mortgage arrears;

— the Central Bank of Ireland published a revised Code of Conduct on Mortgage Arrears effective from 1st July, 2013 following approval by the Central Bank Commission and consultation with the Minister for Finance;

— the Central Bank of Ireland will commence a review of Code of Conduct on Mortgage Arrears compliance later this year; and

— the latest Central Bank of Ireland mortgage statistics show that the number of mortgage accounts for principal dwelling houses in arrears fell for the fourth consecutive quarter at the end of June 2014;

welcomes the Minister for Justice and Equality’s decision to waive all fees previously payable to either the Insolvency Service of Ireland or the Courts by a debtor who applies for any of the debt solutions available under the Personal Insolvency Act 2012;


— that a comprehensive mortgage advisory service and mortgage-to-rent scheme have been put in place; and

— the recent reductions in mortgage interest rates by certain financial institutions which will have a positive impact on the affordability for their customers;

accepts that the vast majority of mortgage holders are meeting their repayment commitments;

further notes that:

— the Government is committed to bringing forward legislation that protects consumers whose mortgages are sold to unregulated entities and that the Department of Finance has recently published the submissions it received in response to a public consultation process seeking views on this legislation; and

— it is anticipated that this legislation will be published by the end of this year; and calls on the Government to continue and intensify its work across the relevant Departments and Agencies to deal with the mortgage arrears problem.”

I wish to reassure Deputy Collins and other speakers that I also welcome this debate. I certainly do not view it as trivial and I accept the bona fides of those who have tabled the motion for an important and genuine discussion that we need to have in our national parliament. A lot of good work has been done on a cross-party basis at Oireachtas committees and in this Chamber on the issue of mortgage arrears in recent years.

Before being appointed as a Minister of State, I remember the bi-partisan way in which members of the Committee on Finance, Public Expenditure and Reform worked in questioning the chief executive officers of banks and in putting together reports and recommendations. I know there was an exchange on some of those recommendations with my colleague, the Minister for Finance, Deputy Noonan, during finance oral questions on the last occasion in this House.

I wish to convey the Minister, Deputy Noonan's regrets that he cannot be here for the opening statements this evening. I hope Members will understand that is because he is attending the Joint Committee on Finance, Public Expenditure and Reform.

I welcome the opportunity to speak on this important issue and to set out recent developments in the area of mortgage arrears. I look forward to the debate tonight and tomorrow. I think everybody in the House will agree that the Government inherited a severe mortgage crisis from the previous Fianna Fáil-led Government. Like the economic, fiscal and jobs crisis that we inherited, this Government resolved to tackle the issue head on and significant progress has been made. We have prioritised actions to deliver real and sustainable solutions to borrowers. That is not to say that the work is in any way complete so far.

There is no doubt that some families across the country are experiencing genuine difficulties in meeting their monthly mortgage repayments. This Government is fully aware of the impact that this is having on these families and their lives. The Minister for Finance has said previously that we cannot have a situation where some families are living under the stress of mortgage arrears, are unable to enjoy even a modest standard of living, and are excluded from participating in the economy - effectively from living their lives because of their debt situation.

The Government has developed a comprehensive cross-departmental strategy to support households in arrears in line with the main recommendations of the 2011 Keane report. The primary focus of this strategy is to support those home-owners in difficulty with their mortgage repayments rather than those who, while they may be experiencing negative equity on their homes, can still meet their mortgage repayments.

The implementation of this strategy is overseen at Government level by the Construction 2020, Housing, Planning and Mortgage Arrears sub-committee, which is chaired by the Taoiseach, and at official level by a mortgage arrears steering group which is chaired by the Department of Finance. The Government's strategy is built around the four pillars for action as recommended by the Keane report. These are: engagement with the banks to develop appropriate measures for their customers in mortgagearrears; personal insolvency law reform and implementation; mortgage to rent; and mortgage advisory function. A number of measures have been advanced in this regard.

The key indicator of success in dealing with mortgage arrears is the development and application, where appropriate, of long-term solutions. Short-term forbearance can be a worthwhile response to people experiencing temporary mortgage difficulty. The Keane report, however, made clear that this would not be a sufficient response to mortgage difficulty and that it would be necessary to develop sustainable restructuring responses to more long-term mortgage difficulty.

Lenders were encouraged to develop practical solutions tailored to individual circumstances for people in the most serious difficulty with their mortgage. In that regard, in March 2013, the Central Bank published the Mortgage Arrears Resolution Targets - or what is commonly known as the MART framework - which set out the performance targets for mortgage arrears resolution at six mortgage lenders. The six lenders are AIB, Bank of Ireland, Permanent TSB, Ulster Bank, KBC Bank Ireland and ACC.

Under this rolling process, quarterly performance targets have been set to require the banks to propose and put in place durable long-term solutions to address individual cases of mortgages in difficulty where the mortgage is more than 90 days in arrears. In that context, Deputies will be aware that the Central Bank set progressive targets in 2013 and throughout 2014 and has indicated that it expects that proposed solutions be made in respect of 85% of principal dwelling houses and buy-to-let arrears cases, and that concluded solutions be made with 45% of cases of greater than 90 days in arrears by the end of 2014.

The most recently published information from the Central Bank audit is in respect of the end December 2013, targets and proposed solutions. In that regard, the Central Bank has indicated that the December 2013 MART targets were achieved by all lenders. That is: at end December proposed solutions were issued to greater than the 50% target of mortgage accounts in arrears greater than 90 days; and concluded solutions were issued to greater than 15% of accounts in arrears greater than 90 days.

This MART initiative has resulted in significant numbers of long-term restructured arrangements being put in place. At the end of March 2013 when the MART targets were set, Central Bank statistics showed that 79,600 restructures were in place for principal dwelling houses. At the end of June 2014, this number had increased to 102,000 restructures.

Deputies will be aware that a monthly reporting regime on mortgage restructures and arrears for the six main lenders covered by the Central Bank's MART process has been put in place by the Department of Finance. The Department's latest publication, with data for the end of August 2014, shows that the number of principal dwelling home or PDH mortgage accounts in arrears of greater than 90 days has fallen by over 9,500 accounts when compared to the start of the year.

When the Department's series began in August 2013, the six lenders had 2,500 split mortgages in place. At the end of August 2014 there were over 16,000 split mortgages in place. Mortgage-to-rent has already been referenced in the Private Members' motion. It is important to note that this scheme is being reviewed by the Housing Finance Agency with two aims: first, to reduce the time it takes to process an application; and, second, to agree valuations of homes which are acceptable both to banks and borrowers.

During the same period, permanent restructures for family homes increased from around 41,000 to almost 80,000. Similarly, the Central Bank's latest mortgage arrears and restructures publication for the end of the second quarter of 2014 shows that the number of mortgage accounts for principal dwelling houses in arrears fell for the fourth consecutive quarter. Out of the 102,000 principal dwelling mortgage accounts classified as restructures, 81% were deemed to be meeting the terms of their current restructuring arrangement, which I think we can all agree is a significant achievement.

The data published by the Department of Finance, as well as the mortgage arrears and restructures data published by the Central Bank on a quarterly basis, demonstrate some success by lenders in addressing accounts in mortgage arrears, as well as measures to prevent borrowers from going into arrears.

It is important to publish these figures which are put on the website. In that way they are transparent so that the public can scrutinise them and hold people to account. I am conscious that we are all throwing around figures and I know Deputy Mathews sometimes gets concerned about percentages, but these restructures concern real individuals living behind the hall-doors of real family homes. With that in mind, it is worth looking at the Department of Finance's August 2014 figures that have been published, including what some of the permanent solutions consist of.

With the indulgence of the House I will cite the figures. To the end of August 2014, 15,048 mortgage accounts were offered a term extension. Some 1,833 were offered interest only, while 22,782 were offered arrears capitalisation. A further 11,047 were offered fixed repayments greater than interest only or interest modifications. Some 16,198 were offered a split mortgage, which I think people will accept is a significant increase.

The split mortgage is a joke.

Some 12,497 were offered hybrid - a combination of treatments. That totals to the figure to which I referred earlier, which was 79,405. It is important to put this in context because these are solutions on offer to real people. They are not just numbers, they do represent families. As much as I am willing to acknowledge that there are still families with genuine difficulties, so we all need to put our heads together, work harder, better and accept that the job is not yet done, one must also acknowledge that the 79,405 mortgage accounts represent progress.

It is progress for 79,405 people.

It is illusory.

From engaging with me, Deputy Mathews knows that I tend not to interrupt and I would appreciate if he would do the same.

The Minister of State is trying to convince us that something is true when it is illusory.

It is important to mention the positive news announced today about the initiative between AIB and the Irish Mortgage Holders Organisation, IMHO. Deputy Joan Collins referred to this. The partnership initiative has resulted in more than 1,300 sustainable restructures being put in place over the past 12 months. That is also welcome news. The initiative demonstrates that where there is real engagement between borrowers and lenders, sustainable restructures can be agreed to the benefit of the lenders and borrowers. Any practical initiative that can help people in genuine mortgage arrears difficulties and facilitate and improve the quality of engagement between the bank and the borrower is to be welcomed. In that regard, I commend the IMHO on its role.

With regard to repossessions, the Government has made it clear that repossession of a family home should be the last resort. The Central Bank code of conduct on mortgage arrears, CCMA, places an onus on the banks in respect of co-operating borrowers to explore all the options for an alternative repayment arrangement offered by the lender to address a primary dwelling mortgage difficulty before any legal action is considered. The CCMA provides that lenders may only commence legal proceedings for repossession where they have already made every reasonable effort to agree an alternative arrangement with a co-operating borrower. Any bank proceeding to legal recourse with co-operating borrowers in circumstances where an alternative sustainable arrangement is feasible and can be agreed is not acting in a manner consistent with the mortgage arrears resolution process or with the CCMA. These efforts can only achieve positive results in circumstances where there is real engagement between borrowers and lenders. This is an example of how the engagement between AIB and the IMHO has worked well. Perhaps lessons can be learned from it. Where this does not happen, the lender may have no other option but to go down the legal route to deal with an arrears case. If that course of action leads the borrower to commence a constructive engagement, this can lead to a more favourable conclusion for both parties and may allow the borrowers to remain in the family home. It should also be noted, however, that even if the mortgage arrears resolution process has concluded and where legal proceedings have commenced, the Central Bank's code requires that a lender must continue to maintain periodic contact with the borrower and-or his or her nominated representative to see if an alternative repayment arrangement can be agreed even at that late stage.

The CCMA is an important consumer protection mechanism. Monitoring compliance with CCMA continues to be a core part of the Central Bank's work programme and is also an enforcement priority for the bank. The code was reviewed, revisited and revised to strengthen consumer protection and force lenders to engage systemically with borrowers before proceeding with legal cases. The Central Bank will be commencing on-site inspections of a number of mortgage lenders in the coming months. This is an important development.

Even if a repossession case has commenced in the legal system, the Land and Conveyancing Law Reform Act 2013 provides a power to the court to adjourn a repossession proceeding on a principal private residence to enable the borrower to consult a personal insolvency practitioner, PIP, and, where appropriate, to instruct the PIP to make a personal insolvency arrangement proposal. In formulating a personal insolvency arrangement proposal, the Personal Insolvency Act 2012 places an onus on a PIP to do so on terms that shall not, in so far as is reasonably practicable, require the borrower to dispose of an interest or cease to occupy the house.

The strong view of the Government is that, in respect of co-operating borrowers under the mortgage arrears resolution process, repossession of a person's primary home should only be considered as a last resort. Every effort should be made to agree an acceptable arrangement as an alternative to repossession. The CCMA and mortgage arrears resolution process outlined provide a strong framework to ensure this happens.

Personal insolvency reform was a key recommendation of the Keane report. The Personal Insolvency Act 2012 was complex legislation that significantly modernised Ireland's insolvency regime. As with any such major reform, the Department of Justice and Equality is keeping the effectiveness of the legislation under review to ensure it achieves the objective of providing an efficient way of resolving unsustainable personal debt positions in a way that is as fair as possible for debtors and creditors. There have already been some amendments to the legislation during 2013, which were of a minor nature and primarily operationally focused. I welcome the decision by my colleague, the Minister for Justice and Equality, to waive all fees previously payable to either the Insolvency Service of Ireland or the courts by a debtor who applies for any of the debt solutions available under the Personal Insolvency Act. The waiver was announced last month by the Insolvency Service of Ireland and takes effect until the end of 2015, when it will be reviewed. The ISI has also announced that, for the same period, it will provide a contribution of €750 to defray the cost of a PIP if a reasonable insolvency proposal agreed with a debtor is refused by creditors. This was emerging as an issue in many Members' offices. There is now the ability to defray some of the costs. The debtor should not be faced with a bill arising from the creditor's refusal in this situation.

The recent ISI quarterly statistics were published in July. In summary, during the second quarter, 67 debt relief notices, 30 debt settlement arrangements, and 27 personal insolvency arrangements were approved. In addition, 98 bankruptcy adjudications were made in the second quarter of 2014 following the reduction in the duration of bankruptcy to three years. In the first half of this year, there were 164 bankruptcy adjudications compared with 58 in 2013. It is hoped the welcome initiatives announced by the ISI on fees and PIP costs will increase the take-up of the ISI services and that more negotiated debt settlement arrangements will occur as a result.

The fact the ISI is in place has acted as a catalyst and can encourage debtors and creditors to reach bilateral deals to address their insolvency. In the absence of bilateral deals, the new statutory frameworks are a mechanism requiring all relevant creditors to engage with and respond to an insolvency arrangement proposed by a debtor. The spirit of engagement and bringing people together to look bilaterally at addressing debt is a welcome step and one that must be under constant review to ensure it is working as intended by the House.

On foot of the recommendations of the Keane report on mortgage arrears, the Government launched the mortgage-to-rent scheme nationally in June 2012, targeting low-income families whose mortgage situation is unsustainable and where there is little or no prospect of a significant change in circumstances in the foreseeable future. The scheme ensures the family remains in the home while ownership is transferred to an approved housing body that, in turn, rents it to the original owners. Eligibility requirements are in line with other forms of social housing support.

The Government accepts that the number of completed mortgage-to-rent cases remains low despite the increase I announced. More than 2,500 cases have been submitted to date by the lenders, however, and of these around 1,000 were ineligible or terminated during the process, of which 263 cases were not progressed because the household in question was deemed to be over or under-accommodated. A significant number of cases are currently with the lenders, who are seeking the consent of borrowers to share information and for the carrying out of an independent valuation. Some cases are being actively progressed. To date, some 50 cases have been completed, which means these 50 families have not had to move out of their homes. A review of the scheme was carried out recently by the Housing Agency on behalf of the Department of Environment, Community and Local Government. The review resulted in comprehensive changes to the process that have been agreed with all parties, with the Housing Agency taking more of a management role in the scheme. I hope this will see an increase in the roll-out of the scheme. A new protocol has also been introduced that will define how the process will work in the future. The protocol outlines the roles and responsibilities of all the stakeholders to the process, which should encourage greater numbers to participate in the scheme.

The Government has provided an enhanced range of information and guidance services for mortgage holders, including a dedicated information website, a mortgage arrears information and advice helpline, and the provision of independent financial advice to mortgage holders being presented with long-term mortgage resolution proposals by their lenders. This advice is provided by qualified accountants drawn from members of the main accountancy institutes in Ireland who have agreed to participate and support this independent service. When a lender is proposing longer-term mortgage resolution, the lender will advise the borrower to obtain independent financial advice on the proposed arrangement and, if the borrower wishes to avail of this option, the lender will pay €250 to an accountant of the borrower's choosing for the provision of this advice. The independent financial advice is available to all mortgage holders who have been offered long-term forbearance options by their lenders in respect of a mortgage secured on a primary residence. These are important supports introduced by this Government with the intention of ensuring the borrower is fully informed and understands the terms of the agreement being offered to him or her.

The Government is aware of the concerns of some mortgage holders whose mortgages have been sold to third parties. The Minister for Finance has informed the House previously that he is committed to bringing forward legislation that protects consumers whose mortgages are sold to unregulated entities. The Government has reiterated this commitment on several occasions. The Department of Finance undertook a public consultation process in July and August of this year seeking views on its proposed legislation to protect consumers whose loans are sold to unregulated entities.

The Department of Finance recently published submissions received from a range of respondents from the financial services industry, consumer groups, public representatives and individuals and other stakeholders. Officials in the Department are carefully considering the submissions and it is anticipated that legislation will be published by the end of this year.

This Government has put in place a wide range of initiatives to assist homeowners in mortgage arrears. The main banks have been set targets to propose and conclude sustainable solutions to mortgage holders in arrears, and they are meeting those targets. A new, innovative personal insolvency regime is in place, the mortgage-to-rent scheme has been rolled out nationwide, and the Government's mortgage advice and information service has been established. This Government is dealing with the mortgage crisis it inherited. It has now developed and provided a suite of measures designed to address the problem of over-indebtedness. This strategy will continue to deal with unsustainable debt positions and do so in a way that is as fair as possible to borrowers and lenders, but also in a way that seeks to minimise the costs involved for wider society. The statistics issued by the Department of Finance and the Central Bank demonstrate that the numbers in arrears are falling, the number of restructures is rising and much of the groundwork laid by the Government is having the desired effect in relieving families of the burden of debt and anxiety associated with being in arrears and putting them on a sustainable footing for the future. I look forward to the rest of the debate.

I welcome the opportunity to speak on this very important motion, and I am glad it has been introduced. I remember writing a document in 2010 called Parked Percentage Mortgage Plan, which was eventually fed into the Keane report, which called it a split mortgage. This was a start, as at the time there was hardly anybody in the country who did not have some iron in the fire, having bought an expensive property or become over-leveraged. In the financial meltdown we experienced, people were wondering how to survive. However upsetting it is for businesses to go to the wall or for a person to experience the possibility of losing a job, the idea that one could lose one's home was terrifying. At that stage, the basis of a process for dealing with this was put in place. We should have no doubt that the banks were not in a position or they lacked the skill set to deal with the issue. They made many mistakes, but, like everybody else, I can only give most of the banks credit for the way they are starting to deal with the problem now. As most Members are aware from people attending their clinics, we have had discussions with banks about people in genuine long-term distress. The matter has to be dealt with on a one-to-one basis. One cannot advertise such cases, but they are very important to those involved. The formulation of solutions is for people in serious financial difficulty. A case of arrears by itself is not enough; the arrears must be of such a scale that they cannot be tackled.

There is the case of Tony O'Reilly, for example.

We must remember that the country is recovering. I am not smiling when I say that. In such a recovery, people have the opportunity to repay more than they thought they could some time ago. It is important that we have a solution for every person involved. Ironically, the solutions fitting mortgages may also help a sector with which I am involved, that of small businesses. Most of these businesses have some non-core debt, which can be as grave as mortgage debt in that it can pull down the core business. Solutions involving the stretching of non-core debt and resolutions affecting non-core debt are important, because this relates to people's jobs. These businesses are starting to grow, thanks be to God.

I do not like the inclusion of the word "mandate" with regard to creditors and mortgage servers. A deal must be done in a spirit of agreement between both parties, taking into account the full aspects of the code of conduct on mortgage arrears. Both parties must be genuine in their approach. Mandating somebody to do something would mean one party would leave unhappy. Both parties must hope a resolution can be achieved fairly.

There is some merit in the idea of a split mortgage with no interest on the warehoused portion. If a person with a €200,000 asset can only afford to pay interest and principal of €100,000, the balance of €100,000 would be parked. If that person passes on the house to a son or a daughter with €100,000 left to be paid, but the value has risen to €300,000, there is surely a case to be made that some portion of the interest should be paid in a fair way. These moneys must be returned to the State. I would gladly take on an asset if I knew I could take it on at 50% of current value. We must be practical, and we cannot have the State bear all the burdens where mistakes have been made. We must ensure the process can be fair to the State also. Many people in the House have given out about how we all were burdened with debts from the banks and nobody will appreciate us adding more unnecessary burdens on the taxpayer. The people would certainly reward us if genuine compassion were shown towards people with family homes.

There are people with second homes or buy-to-let properties. If a party cannot afford the payments on a buy-to-let property, the issue is not as serious as if it is a primary dwelling. If the problem cannot be dealt with, the properties should be recycled into the system and the noose should be removed. I agree that we need to know what will happen when properties are surrendered. When banks do deals with people, they are working as best they can.

It is important that both parties participate honestly and with genuine interest in ensuring it can be a fair deal. It should not be a sweet deal for one party and it should apply equally to both. It is very popular to give out about banks, but I have dealt with them for many years. I have been in business for 20 years and I have dealt with banks from when there was no money available in 1991. There is now a realisation that the people who have come through this recession have been toughened and will survive. They will thrive, in time, but they must be given some breathing space. In my experience, and particularly in the past two years, some banks have acted very responsibly. We have brought constituents to meet their representatives on a regular basis and although this may have been a difficult experience a couple of years ago, there is now a real willingness to engage. That is fantastic. Only two weeks ago I brought in a couple who were in dire straits and were almost afraid to discuss the issue. Although they were paralysed with fear initially, they realised the people from the bank were not that frightening. It is very easy to blame banks, but we have a responsibility to deal with this issue.

The code of conduct on mortgage arrears and the Keane report have been very helpful. Many people do not realise how helpful they are. When debt is burdensome, some people may fail to interact as they would if they were in the best of health. Mortgages were given out to people who should not have got them. For example, mortgages were given to people over 50, who were expected to be healthy and wealthy for the next 20 years. That was a lot to ask. Others got mortgages for houses they could never afford. We need to achieve a sense of realism, and the country cannot offer interest-only deals on mortgages where the house value bears no relation to the means of the people living in it.

This is a very important discussion, and things are changing. It was a much graver debate three years ago, as nobody could see the light at the end of the tunnel or foresee a recovery. A growth rate of 4.6% or 4.7% is colossal. It means there are many more people at work and people are able to contribute more. They may not be able to contribute the full amount of an initial mortgage, but the solution is evolving more quickly every day.

Property prices are increasing and negative equity is becoming less of an issue, though it still exists. Negative equity does not determine the ability to pay off a debt. Many of us own properties that are in negative equity and we pay for them fully if we can. If a working person can afford to pay an agreed mortgage, negative equity resolves itself in time. We must be careful on this issue because we cannot land taxpayers in greater debt while allowing anyone in arrears avail of these measures, rather than genuine cases. If this is opened too broadly people will try to exploit it and that would be wrong. As always, we must first protect people in family homes and thereafter apply a system of priorities. We must examine whether extra houses are required and see what to do about rental properties as they have presented problems. Some people with buy-to-let properties have taken rent and paid nothing back.

Things are changing and this discussion is important. People who are genuinely in debt should talk to their mortgage providers in the spirit of agreement. Banks have the ability to deal with the problems that exist.

I welcome the opportunity to contribute to this debate and thank Deputy Joan Collins and the other members of the Technical Group for tabling this motion. I apologise that I was not here to listen to some of the contributions so far as I had to attend a meeting of the Oireachtas Committee on Finance, Public Expenditure and Reform - the Minister, Deputy Noonan, is addressing pre-ECOFIN business.

Tonight's debate is vital as there may be a sense of complacency when it comes to the issue of mortgage arrears. The issue has not yet been dealt with and, while action is being taken by the banks, it is a scattergun approach. In some cases they get it right and in others they do not. The approach of banks to mortgage arrears shows a distinct lack of consistency and transparency and this is evidenced in the approach of the two pillar banks. Today the Irish Mortgage Holders Organisation announced that in the past year over 1,300 of its clients restructured their mortgages with AIB. Up to 100 of these cases involved writing off mortgage debt, part of the principal balance. Bank of Ireland, the other pillar bank that was saved by the State, is in a healthier position and a majority of its shares are in private ownership. In contrast to AIB it has an entirely different policy and will not give mortgage write-offs under any circumstances. Borrowers in similar circumstances are being treated entirely differently by the two pillar banks and this is fundamentally unfair. We should not stand over this approach.

The code of conduct on mortgage arrears is at the heart of this motion. It was introduced in 2010 and has served borrowers well, in general, by providing a rule book lenders must abide by when dealing with people in mortgage arrears. The rule book was diluted by the current Government in 2013 when it allowed banks to move legally within 30 days against people who are deemed not to be co-operative. In other words, the banks had the power to deem people as not co-operative and issue legal proceedings within 30 days. The restriction on the amount of contact a bank can have with a person in arrears was lifted. Previously banks were limited in how much contact they could have with a person in arrears but the changes mean they contact such people regularly. The 12 month moratorium was replaced by an eight month moratorium. Borrower protection was significantly diluted in the revised code of conduct that was published in 2013.

I mentioned that different banks are taking different approaches but this can also happen within institutions depending on the person a borrower must deal with. This happens because banks are not working to a common set of rules on mortgage arrears cases. Does anyone in this House know the criteria for how a borrower in arrears can qualify to have mortgage debt written off? The criteria are not published so I do not know how such decisions are made. Some banks have taken a hard line approach and this has led to the development of deeply unfair situations. It is not good enough because an essential element of fairness is consistency - people must be treated consistently and this is not happening at the moment.

Deputy Barry is correct that there is movement and some deals are being done. Some cases are being handled sympathetically - I have been involved in some and the outcomes were fair - but in other cases it is like banging one's head against a wall. We are not making the progress that we should and I cannot point to a document that requires banks to deal with cases in a certain way. Ultimately, the bank makes the final call. The mortgage arrears targets programme has resulted in much activity but the bank still decides what constitutes a sustainable solution.

That is correct.

The definition of a sustainable solution to a mortgage arrears problem is set out towards the back of the mortgage arrears targets programme document and it simply states that a bank must satisfy itself that the solution it offers the individual in arrears is sustainable. The bank acts as judge and jury despite the fact that it is party to the transaction and has a vested interested in securing a certain outcome. I stand by my assertion that the banks hijacked the mortgage arrears targets programme by issuing thousands of threatening legal letters to borrowers who were already suffering stress and anxiety. The number of repossessions has increased dramatically. Some figures I received in Cork recently are frightening. An ejectment civil bill is a step in the process that can lead to repossession of a family home and in the first six months of 2013 there were 44 such bills in Cork Circuit Court. In the second half of 2013 there were 246 ejectment civil bills and this figure grew to 335 for the first six months of 2014. Additional court sittings are being scheduled in Cork to deal with the backlog of ejectment civil bill cases. The rhetoric says repossession of the family home is a last resort and should only happen in a very small number of cases but this is not borne out in reality - the truth could not be further from that assertion.

I want to highlight the interest rates Irish banks are charging because this is directly relevant to the debate on mortgage arrears, as the Minister of State knows. The average interest rate in the eurozone for a person taking a new mortgage on a home is 2.56%. The National Consumer Agency website,, allows one to type in criteria for a mortgage and compare the rates on offer by the various banks - those rates are all close to 4.5%. An Irish borrower with a mortgage of €200,000 will pay around €4,000 more in interest every year than a typical borrower in the eurozone. I believe suggestions that the Irish banking system is repaired and meeting the needs of the economy are incorrect because these rates are extortionate compared to the eurozone average. The cost of funds for Irish banks today is around 1% so how can they justify charging 4.5% on a variable rate mortgage?

Tomorrow the Oireachtas Committee on Finance, Public Expenditure and Reform begins its series of hearings with banks and Bank of Ireland will be first in. I will challenge the banks on these issues because they are linked directly to mortgage arrears. AIB made a pre-emptive move last week to reduce its interest rate by 0.25% and I welcome this. I hope the other banks follow suit and reduce variable rates.

What we are really lacking in this country is a competitive banking sector. In the United Kingdom and the rest of Europe a normal switcher mortgage market is available. If a person is paying over the odds for a mortgage, he can apply to another bank and simply move his mortgage, but that is not happening here. Fewer than 200 switcher mortgages were transacted in the first six months of this year. The banks are not open for that business and they have no wish to hear of it. The real test of the Allied Irish Banks move to reduce the rate will be when a customer of Ulster Bank or Bank of Ireland who is paying a higher rate knocks on the door of AIB, explains that he is in a healthy financial position, has never missed a repayment, has a loan-to-value ratio of 60% or 70% and asks whether the bank will consider a mortgage application from him to enable him to avail of the lower interest rate. That will be the litmus test of whether the banks are genuinely open for business and creating a far more competitive environment. This is something the Government needs to deal with.

There is an issue with the code of conduct on mortgage arrears. I imagine the Minister of State is aware that the Central Bank has not imposed even one sanction on any bank in this country for failing to honour the mortgage arrears rule book despite evidence of breaches of the CCMA. These breaches have been confirmed by none other than the Governor of the Central Bank, Mr. Patrick Honohan. He confirmed at an Oireachtas committee hearing on 30 April this year that the Central Bank had found breaches of the code of conduct on mortgage arrears, yet not one sanction has been imposed on the banks. I welcome that the Central Bank is getting around to doing a proper test on the compliance of the banks in Ireland in respect of the CCMA. There have been breaches, they are continuing and the issue needs to be dealt with.

There is a commitment in the Government amendment to deal with the issue of regulating third parties not regulated currently by the Central Bank but which are holding mortgages. This needs to be dealt with urgently. The legislation has been promised before the end of the year. This needs to happen because people are in a very exposed and vulnerable situation. If an issue arises in respect of non-compliance with the code of conduct on mortgage arrears, they have nowhere to turn. They cannot go to the Department of Finance or the Central Bank. No one will listen to their case because these foreign-owned funds are not accountable to anyone in that sense of the word.

The Insolvency Service of Ireland has been an abject failure in respect of its role as a vehicle to deal with mortgage arrears cases and this must be dealt with. No more than a few dozen individual mortgage cases have been dealt with by the Insolvency Service of Ireland. The Government was forewarned about this. The banks were given a veto and several bank representatives stated publicly when before the Joint Committee on Finance Public Expenditure and Reform that they will exercise that veto if any insolvency arrangement is proposed that involves a haircut or write-off in the mortgage balance. They have said this publicly and they are honouring it because that is what is happening. Deals are not being done. Several issues need to be dealt with in terms of access to a personal insolvency practitioner and allowing people who have no net disposable income, after taking into account the cost of living guidelines, to make a contribution to an insolvency deal. These people are locked out of the system and this needs to be dealt with as well. A total of 27 cases have been concluded in which there has been a change to the mortgage arrangement through the insolvency service. The figure is pathetic. It is time to go back to the drawing board. Merely dropping the fees charged by the insolvency service will not adequately address that issue.

The mortgage-to-rent scheme needs to be revamped. It is not working. Again, only a few dozen cases have been completed. Deputies are trying to help people to work their way through the mortgage-to-rent process but it is a bureaucratic nightmare. It is simply not working and must be completely revamped.

The Central Bank has proposed new mortgage deposit rules. The bank is advocating a 20% deposit, which I believe is excessive and will result in social engineering. It will ensure home ownership is beyond many people, especially people from certain socioeconomic backgrounds. That is not fair. People who have parents with the financial means to provide a deposit will be able to get around this rule. I believe a deposit of 10% or 12% is more reasonable and achievable. I accept there is a requirement for a minimum deposit but I believe 20% is excessive.

The mortgage arrears statistics are coming down and that is to be welcomed, but we need to examine the numbers with a degree of caution and scepticism. The overall numbers are coming down but, as far as I can see, the most popular solution is arrears capitalisation. We have seen 25,700 arrears capitalisation cases. Once the arrears have been capitalised and the new repayment method is honoured, the person is taken out of the arrears statistics. It is difficult to know, therefore, whether the underlying trend is a significant reduction. I hope this is the case but arrears capitalisation has accounted for 25.2% of the solutions. We know from the statistics published by the Central Bank that this is one of the least successful solutions with only 66.8% of cases honoured in the sense of terms being met. That issue needs to be dealt with. Let us consider the underlying statistics and the issue of long-term arrears. Those in arrears of more than 720 days have increased from 31,000 to 33,000 to 35,000 and to 37,000 in the previous quarter. The solution for these people is to end up in the Circuit Court, as I outlined earlier. This is happening in Cork and elsewhere. There is a need to be far more imaginative and to bear in mind how New Beginning has proposed to deal with the issue while, in so far as possible, keeping the family home for the majority of the people concerned.

I welcome the motion atá curtha chun tosaigh ag an nGrúpa Teicniúil i dtaobh an cheist rí-thábhachtach seo. Earlier this year members of the Joint Committee on Finance, Public Expenditure and Reform, of which I am a member, helped to draft a report on what should be done to tackle our mortgage crisis. The report received all-party support and the support of the Independent Members on the committee. It was based on the engagement we had with all the players in the mortgage crisis, including the banks and those on the front line as well as submissions we received from people who have borne the brunt of the banks' attitudes. Regrettably, the Government has shown absolutely no desire to engage with the report or to implement its recommendations. It is clear from the Government amendment that it considers that this issue requires nothing more to be done. The motion put forward by the Technical Group includes some of the suggestions contained within that report.

The Government's attitude is an insult to the 90,000 families who were in mortgage arrears at the end of the second quarter of this year. The Government needs to wake up to the reality that the problem has not gone away. It may be decreasing but it has not gone away. The fact the Government is in its fourth year of office and there are so many people in mortgage arrears is an indictment of Government policy. The Government huffs and puffs at the banks for including evictions and so-called voluntary sales as solutions under the targets scheme, but the fact is those in Government have sat on their hands and allowed the banks to do this.

The Minister for Finance, Deputy Noonan, has taken cheap shots across the floor of the finance committee. He said I have been scrambling around for four years to find case studies of people who have been evicted, but that is not the case. I explained to him I received a telephone call only two weeks ago from someone who had lost his home in County Roscommon. The person is homeless and had been living in emergency accommodation provided by the local authority for 14 days at that point. This was bed and breakfast and hotel accommodation. The person told me the council cannot afford to provide the service any longer and that the policy is only for provision for three days. The person did not know where to turn to, what to do and what not. That is the harsh reality for some people who find themselves in this situation.

The finance committee report requested that the Minister intervene to ensure the Central Bank does not accept kicking someone out of the home as a sustainable solution. The Government is sitting back and letting the mortgage crisis unwind itself regardless of how many families are left homeless. That is the only conclusion we can draw from the amendment tabled by the Government.

It is an indictment of the Government that it is leaving the heavy lifting to groups such as the Irish Mortgage Holders Organisation. I commend that organisation for its work and success, particularly with regard to the new figures it released yesterday for its engagement with AIB and also its engagement with other banks on behalf of people who find themselves in difficult situations.

The Technical Group's motion is correct that the code of conduct on mortgage arrears is not fit for purpose. Sinn Féin is aware of this, which is why we made a submission on the review of the code of conduct. I am glad that it has been acknowledged by the Technical Group. It is also the case that the legal status of the code of conduct is untested. It must be put on a statutory footing.

The motion calls on the banks to be required to offer one of a number of named solutions. I would go further and provide that before taking any legal action a bank should be required to offer each of the options available under the code of conduct, as requested in the committee's report. The committee's report also calls for clarity on the residual debt following a repossession or voluntary sale, something that is echoed in the motion before the House. For my party, that clarity should be a clean break from debt in the event of loss of a family home. Sinn Féin has written the legislation to allow this to happen. We brought it to the floor of the Dáil last year, but, again, the Government would not accept our proposal. This is the position every member of the finance committee has adopted, including Fine Gael and Labour Party Members, but it is clear that the Government and its Ministers are completely out of touch with their party members who understand what is happening on the ground and have spoken with one voice to have the issue addressed.

This week I have been contacted by a new batch of homeowners who are extremely worried that they have been left high and dry because their mortgages have been sold to vulture funds. These homeowners who had mortgages with Bank of Scotland are the latest group of people who are worried about their futures because their loans are now owned by vultures. I note that the heads of the long-promised Bill to regulate these funds have been put forward, but they are not with the finance committee. It is welcome that they have been brought forward, but why has there been such a delay in dealing with the issue? The delay in dealing with this urgent legislation is inexplicable. I again urge the Minister to prioritise it and bring it before the House as soon as possible.

This issue is being left on the long finger while people are worried and literally cannot sleep. I have pointed out time and again that this is not just a financial crisis for these individuals but a personal health crisis. People are simply at the end of their tether as a result of not knowing whether their homes, in which they have invested and reared their children, will be theirs tomorrow, the day after or the following day. They are pleading with the Government to do something, but, unfortunately, its proposed amendment to the motion is just an insult to them.

Debate adjourned.