Mortgage Arrears and Repossessions: Motion [Private Members]

I move:

That Dáil Éireann:


— that mortgage arrears in Ireland, at 156,352 mortgages as of December 2014, are significantly higher than in comparable countries;

— the on-going suffering and social cost for those affected by arrears and repossession; and

— the socioeconomic cost for the nation of mortgage arrears and repossessions;

acknowledges policy interventions have been undertaken, including the:— Personal Insolvency Act 2012;— Code of Conduct on Mortgage Arrears; and— Mortgage Arrears Resolution Targets;welcomes:— recent reductions in total mortgages arrears levels; and— initiatives by some lenders to provide borrower-focussed debt restructuring solutions;supports the recommendations of the 2014 cross-party Report on Hearings on Matters Relating to Mortgage Arrears Resolution Processes by the Joint Committee on Finance, Public Expenditure and Reform;asserts that policy objectives pertaining to mortgage arrears include:— minimising socioeconomic harm;— avoiding repossession of the family home where possible;— ensuring the dignity of all parties, in the resolution of unsustainable debts;— ensuring equity in the resolution of unsustainable debts;— ensuring restructures are truly sustainable for all parties;— minimising rehousing needs;— avoiding incentives for strategic default;— ensuring adequate advice and representation for borrowers; and— ensuring adequate insolvency options for borrowers;notes with concern, the:— rising number of repossession cases before the courts;— lack of financial expertise available to many borrowers facing mortgage difficulties and repossession;— lack of legal representation available to many borrowers facing mortgage difficulties and repossession;— inconsistency in approach being taken by different lenders to mortgage restructuring, including repossessions;— lack of transparency in reaching decisions on mortgage debt;— lack of a mechanism to mandate lenders provide reasonable solutions;— absence of stress testing of restructuring proposals;— low levels of insolvency arrangements being agreed, including bankruptcies;— prevalence of five year income attachment orders to bankruptcy orders; and— low take-up of the mortgage-to-rent scheme and onerous eligibility criteria; andcalls on the Government to bring forward proposals for consideration, within 6 weeks, to:

— fund:

— the provision, at the start of the process, of independent financial expertise to borrowers in arrears, including personal insolvency expertise, where those borrowers cannot afford such expertise; and— the provision of adequate legal representation to borrowers facing repossession threats, where those borrowers cannot afford such representation;

— request the Central Bank of Ireland to:

— define what constitutes a sustainable solution from the borrower’s point of view, including stress-testing and the retirement period for borrowers; and

— strongly incentivise:

— the provision of a suite of solutions, to include split mortgages, mortgage-to-rent and certainty on residual debt when properties are sold / surrendered, across lenders; and— lenders so as to realise consistency, transparency and fairness in proposed solutions, across lenders;

— amend the Personal Insolvency Act 2012 to:

— reduce the bankruptcy period to one year, until resolution of the mortgage arrears issue;— reduce the maximum payment attachment order period to three years, until resolution of the mortgage arrears issue;— simplify / streamline the personal insolvency processes;— empower the Insolvency Service of Ireland (ISI), to provide formal opinion, where solicited by a Personal Insolvency Practitioner (PIP), as to the adequacy of restructuring proposals put forward by the PIP; and— remove the payment of VAT from insolvency disbursements;

— amend the Land and Conveyancing Law Reform (Amendment) Act 2013 to:

— ensure any repossession action includes a sustainable restructuring proposal for all outstanding debts; and— allow consideration of ISI opinion as to the adequacy of restructuring proposals put forward by the PIP, as grounds for refusing an application for possession;

— amend the parameters of the mortgage-to-rent scheme so that a reasonable number of homes qualify for consideration;— provide consideration of a mortgage-to-lease scheme, providing off-balance sheet funding to purchase repossessed homes; and— review the outcomes of repossession hearings to understand the level of consistency with which possession orders are, or are not, being granted.

I am sharing my time. The motion before the House provides a comprehensive policy solution to the mortgage crisis. It was compiled with significant input from a cross-party report by the Joint Committee on Finance, Public Expenditure and Reform and with expert input from people working in the field. If implemented, the motion would immediately and substantially increase the pace at which the mortgage crisis is resolved. It would provide consistency, transparency and fairness in the way borrowers are dealt with by the different banks. It would ensure that every opportunity was explored to keep people in their homes. It would ensure that people were treated with dignity and that they had access to necessary financial expertise and legal representation. It would ensure that so-called sustainable mortgage restructures were truly sustainable for lenders and borrowers. It would minimise the need for the State to house people after possession orders were granted and ensure that those needs were met where required. It would avoid the use of strategic default and ensure that solutions were sought for those who cannot pay rather than for those who will not pay. It would turn the insolvency legislation and bankruptcy into the tools they are meant to be rather than the failures they are. It would turn the mortgage to rent scheme into a viable route for many people. It would leave the State with additional social housing stock at no additional cost to the Exchequer. The motion would do this at minimal cost and maximum gain to the Exchequer. It requires no additional recapitalisation of the banks with public money. The motion is not politically motivated. It recognises positive trends in the mortgage crisis. It recognises policy efforts by the Government and the Central Bank of Ireland. It brings to the Dáil many recommendations included in the report of the Joint Committee on Finance, Public Expenditure and Reform which was published last year. Had the measures in the motion been implemented in 2011, the mortgage crisis would by now be a thing of the past. The economy would be growing faster, public finances would be healthier, unemployment would be lower and untold social harm and distress would have been avoided. The measures in the motion, however, have yet to be implemented. As a result, more than 150,000 mortgages in Ireland were still in arrears in December. Approximately 400,000 men, women and children are living in these homes. What do they face?

The Joint Committee on Finance, Public Expenditure and Reform published a report last year which was supported by every member of that committee bar one. The member was not a Government Deputy. The committee met with the chief executives of the four main banks and with organisations working with borrowers on a daily basis. We met with the Insolvency Service of Ireland and the official assignee in bankruptcy. We met with the Governor of the Central Bank and received submissions from professional bodies including those representing personal insolvency practitioners. What did we find? We found that those in mortgage arrears face a system that is neither transparent nor consistent. We found that while some lenders are making efforts, others are not, particularly in my view Bank of Ireland. We found that the personal insolvency process was clearly not delivering personal insolvency or bankruptcy arrangements at any scale. We found that sustainability was narrowly defined from the point of view of the lender and not the borrower. We found that many mortgage restructures did not have a plan for when borrowers retired other than to sell their homes. We found that some lenders were far too keen to initiate legal proceedings. We found a lack of transparency for borrowers including, for example, in explaining why particular restructuring options were being offered but not others. We found the mortgage to rent scheme was next to useless. We found that there were potential solutions available which were not being offered or developed by all of the lenders, including debt for equity solutions. In short, we found that while genuine efforts were being made by some lenders, across the country borrowers faced a mortgage arrears environment that was not transparent, that did not ensure sustainable solutions, that did not provide equity, that did not sufficiently protect people's dignity, that did not sufficiently protect Exchequer funds and that unnecessarily hindered economic growth and job creation.

The joint committee's report called for changes to address all of these issues. Nearly one year later and an incredible seven years into the mortgage crisis, however, these changes have not been implemented. They were not implemented by the last Government and they have yet to be implemented by this one. The problems identified, which will be familiar to every Deputy, are being played out in every Circuit Court in the country. I encourage every Deputy to take a morning to sit through the repossession hearings that are occurring in the Circuit Court in their constituencies. Played out before their eyes, they will see the issues many Deputies, including myself, have raised and the issues that were raised in the report of the joint committee. I will give the House an example from Bray Circuit Court which I attended two weeks ago. In total, ten orders for possession were granted. In eight of these, the borrowers, or defendants as they are called, did not appear. Neither of the two who appeared had legal representation. When the order for possession was granted, one of them turned around and asked people seated in the court "What does all that mean?". He did not understand that he had just lost his home and been given a few months to find alternative accommodation. In this case, no payments had been made since 2011 so it may be that there was no option other than to grant possession. However, we do not know if he would have qualified for mortgage to rent. Might a restructuring have been possible before the arrears started to pile up? We do not know.

What penalties was the Bank adding to the original mortgage payments? We do not know. Was he to be pursued for the residual debts? We do not know. What was the cost of rehousing to the State and could it have been used to keep him in his house with the State taking an equity in the house in lieu of payments? We do not know but, based on what I saw, it is unlikely he had access to financial expertise. It is unlikely that he had a professional negotiate on his behalf with the lender and it is unlikely that he had access to legal representation but chose not to have it in court.

The motion before the House addresses the concerns raised by the finance committee. It addresses the failures seen in repossessions occurring around the country. If this motion is voted through the Dáil this evening and implemented, it will change the case outlined above. The man in question, when falling into arrears, will have access to financial and insolvency expertise. Every possible solution to keep him in his home, including the option of a functioning mortgage-to-rent system, will be pursued. The solutions would be defined as sustainable from his perspective and not just the lender's perspective. The solutions will be available regardless of who is his lender. The insolvency option will be real and available. If court proceedings commence, he will have legal representation in court. If the lender refuses to accept a workable solution, a formal opinion can be provided to the registrar or judge to that effect and the registrar or judge can then refuse to grant possession. If, having explored every option, there is still no viable solution other than to sell his home this will have been spotted early in the process to avoid the build-up of arrears and maximise the residual money left over to find another home.

The changes called for by the finance committee have not been implemented. I have tabled this motion to give the Dáil the opportunity to debate those changes, and others, and to consider adding its voice to the voice of the finance committee. The changes called for would immediately and substantially improve the situation currently faced by hundreds of thousands of men, women and children living in homes that are in mortgage arrears. They have waited far too long for this crisis to be resolved. There is no need for them to wait any longer. All that is needed is for the Dáil to vote through this motion tonight.

I thank the Leas-Cheann Comhairle for the opportunity to speak during this important debate on the issue of mortgage arrears and its impact on families and society. I commend Deputy Stephen Donnelly on bringing this matter before the House. I commend him on not just discussing the huge crisis but for putting forward solutions. That is what Independents do. That is why we are different and that is why we are outsiders to the political establishment and the elite in this country. Independent Deputies will stand up and protect the rights of our citizens. In this debate tonight, we show in a clear and concise manner solutions to the mortgage arrears problem. I challenge Deputy Barry Cowen's comments over the weekend. He stated that Independents need to explain their policies and what they stand for. During the week, Deputy Catherine Murphy, an Independent Deputy, did an excellent job on the Siteserv issue. Recently, Deputy Tom Fleming led the charge in respect of small rural schools and the Government sat up and took note. Tonight is another example. Tonight Deputy Stephen Donnelly pushes this issue. That is what Independent Deputies are about, these are our policies and here are our practical solutions.

As of December 2014, 156,352 mortgages were in arrears in Ireland. That figure is significantly higher than the figure in comparable countries. The suffering and social cost for those affected by arrears and repossession is ongoing. The nation is also suffering the socioeconomic cost of mortgage arrears and repossessions. Tonight I emphasise families and their family homes. They have to be given priority. The banks have to accept this and get on with implementing sensible solutions. The banks should never forget what they, along with a group of elite and incompetent people, did to this State and our citizens. People should realise that it was not the bank guarantee that sank the country but bad decisions made by a small group of this country's powerful citizens during the boom. The identity of who is responsible is no secret, but that is another day's work.

We talk about debt and we talk about supporting people. Independent Deputies will challenge the European view on debt and mortgage arrears. We should look at our own history and that of Europe. Our friends in Greece are European citizens. The lectures coming from the bigger countries are scandalous. Germany defaulted unilaterally in the 1930s. It got massive debt relief in 1953. Poland had large debts written off in 1989. Greece is a damaged and broken country and the European Union should help it. The Government should support it as well. We need a collective response, such as in this debate. We should not be isolating and attacking people.

I welcome the recent reductions in total mortgage arrears levels. I also welcome the initiatives by some lenders to provide borrower-focused debt restructuring solutions. I support strongly Deputy Stephen Donnelly's support of the recommendations of the 2014 cross-party Report on Hearings on Matters Relating to Mortgage Arrears Resolution Processes of the Joint Committee on Finance and Public Expenditure.

We need to look at the details and examine what is actually going on. We need to face the reality of what is happening on the ground. There is a complete lack of financial expertise available to many borrowers facing mortgage difficulties and repossession. There is a lack of legal representation available to many borrowers facing mortgage difficulties and repossessions. There is an inconsistency in the approach being taken by different lenders to mortgage restructuring and repossessions. There is a lack of transparency in reaching decisions on mortgage debt. There is the lack of a mechanism to mandate lenders to provide reasonable solutions. There is a complete absence of stress testing of restructuring proposals. Low levels of insolvency arrangements, including bankruptcies, are being agreed. There is a prevalence of five year income attachment orders to bankruptcy orders. There is a low take-up of the mortgage-to-rent scheme and onerous eligibility criteria. That is what is going on at the moment in this country.

It is important that we focus, but we should never forget that families, mothers, fathers and young children are involved. Many of them lost their jobs and have found themselves in very difficult situations. What do we need to do to help these people? We need to fund provision, at the start of the process, of independent financial expertise to borrowers in arrears, including personal insolvency expertise, where those borrowers cannot afford such expertise. We need to fund the provision of adequate legal representation to borrowers facing repossession threats, where those borrowers cannot afford such representation. We also need to request the Central Bank to define what constitutes a sustainable solution from the borrower's point of view, including stress testing and the retirement period for borrowers. We need to strongly incentivise the provision of a set of solutions across lenders, to include split mortgages, mortgage-to-rent schemes and certainty on residual debt when properties are sold or surrendered. We need to incentivise lenders to realise consistency, transparency and fairness in proposed solutions.

We need to examine the legislation. We need to amend the Personal Insolvency Act 2012 and reduce the bankruptcy period to one year, until resolution of the mortgage arrears issue. We need to reduce the maximum payment attachment order period to three years, until resolution of the mortgage arrears issue. We need to simplify and streamline the personal insolvency process.

We need to empower the Insolvency Service of Ireland, ISI, to provide a formal opinion where solicited by a personal insolvency practitioner, PIP, on the adequacy of the PIP's restructuring proposals. We must consider removing the payment of VAT on insolvency disbursements. These are some of the proposals contained in this excellent motion. It is important that the Government listen. It is not doing so at the moment. It needs to up its game. The Minister of State and the Government must listen carefully to the solutions to these problems.

I support the proposal to amend the Land and Conveyancing Law Reform Act 2013 to ensure that any repossession action includes a sustainable restructuring proposal for all outstanding debts and to allow consideration of the ISI's opinion as to the adequacy of the PIP's restructuring proposals as grounds for refusal of the application for repossession. I would like to amend the parameters of the mortgage-to-rent scheme so that a reasonable number of homes qualify for consideration and for consideration to be given to a mortgage-to-lease scheme providing off-balance sheet funding to purchase repossessed homes. We should review the outcome of repossession hearings so as to understand the level of consistency in the granting of repossession orders. It is important that the Minister consider these proposals.

Today, the Minister for Finance stated that the current strategy had assisted borrowers and lenders in reaching agreements, with the restructuring of 115,000 mortgage accounts. He also stated that the Government intended to make an announcement on this issue in the coming weeks. If he listens carefully tonight, however, he will see that there are excellent proposals in this motion.

It is important that we challenge those who question the integrity, vision and leadership of many Independent Deputies. Not only do we hold the Government to account but, as with tonight's motion from Deputy Donnelly, we propose sensible solutions that are on the side of the people, taxpayers and, in particular, those families that are suffering and in deep crisis owing to mortgage arrears.

I commend my colleague in the Technical Group, Deputy Donnelly, on proposing workable solutions. The Government would be well advised to consider what has been proposed, although there will be a countermotion.

People often view a house as a piece of property. It is one thing to lose a piece of property, but it is another to lose one's home. Every Deputy has met people who were about to lose their homes and had uncertain futures. It is particularly traumatic where children are involved. This morning, I listened to a guy on my local radio station. He was 34 and had a few kids who were farmed out to family members in a different county and were not getting to school. His wife was just out of hospital. He talked about losing weight, stress and breaking down. People must put themselves out there and tell these stories if they are to be understood. This situation is wrong.

Trends have been emerging in this issue, one of which has repeated and become embedded in the prevailing culture. A moral hazard exists for the little people, in that people who owe small amounts are treated differently from those who are heavily indebted. It may not be a mortgage or a home, but there is a difference in their treatment. For example, 11,000 mortgages were cruelly sold by IBRC's special liquidators without any concern for the welfare of individuals. The mortgages were broken up into four segments, including buy-to-let, non-performing and performing loans. Even those with performing loans felt that they were being placed in a perilous situation. I could not see the logic in selling the non-performing loans. People might have been able to sustain their mortgages at the discounted rates at which they were being sold on the markets. Where is the State's financial logic in pursuing people for the full value of their loans, perhaps even through the courts, and those people ending up on housing lists or receiving rent assistance? This contrasts sharply with how large commercial people with debts to the same bank were treated.

Irish Nationwide and Anglo Irish Bank comprised IBRC. Interestingly, a name keeps cropping up, that being, KPMG. It was Irish Nationwide's auditor, but that audit did not show what perhaps it should have. There is a question as to whether KPMG should sue itself to get a result in that regard. Irish Nationwide Building Society's mortgage holders are paying the price.

I will focus on the likes of the Irish Mortgage Holders Organisation, IMHO. If anyone approaches me with a mortgage problem, that is where I go. The IMHO has been telling us that the scale of repossession is accelerating. Where will those families go? The housing waiting list comprises close to 100,000 individuals and families. There is no private rented accommodation. This situation is particularly difficult in areas where the waiting lists are longer. The State will need to assist with rents. If someone cannot repay a mortgage, he or she will not be able to pay commercial rent. Often, mortgages are less than the rents being demanded. If one had a mortgage of €200,000, one would pay more in rent in an urban area. It does not make sense. There are no housing options. It seems illogical to pursue people and put them under such stress without there being solutions.

I listened to Permanent TSB's solution. It may be useful to some, but there is a misplaced presumption that local authority housing is available to people. In my area, one would need to be approximately ten years on the list to have any prospect of getting a house. The situation in Dublin and its surrounding counties is not much different. The situation in Cork is bad as well. While Permanent TSB's solution might suit some people, it will not suit the majority. The benefit is that they could walk away from their debts, but they would also be walking away from their homes. What does one do with one's children and possessions? Does one break them up? There are some solutions relating to council lists, but if one works even part time, one is not entitled to rent support. This situation must be examined in a more realistic and complete way.

The banks are creating significant problems for the State financially. Hundreds of millions of euro are being paid in rental subsidies to families that have been forced from their homes by the banks. If I am to be fair, that includes rent assistance. This does not make economic sense for the State, but it makes sense for the banks. If a bank wants a better balance sheet, it can now point to houses in positive equity. The riskiest time for someone who is in mortgage distress is when there is positive equity in his or her home.

In such cases, the bank will see the value in forcing a sale and securing full payment on the mortgage.

There is nowhere for people to go in that scenario. Mortgage holders who surrender their home in those circumstances will find it almost impossible to get a mortgage in the future and will, therefore, be wholly dependent on the State by way of social housing. In many cases, they will not even qualify for the housing waiting list. This will leave them in the precarious position of having no security of tenure, as leases in the private rented sector are generally renewed annually. Such people are at significant risk of ending up homeless. In fact, I frequently encounter people in employment who are at risk of homelessness. People whose homes are repossessed face the difficulty of never enjoying permanency in respect of where they live. There is societal damage in that, and the damage that is most profound is in terms of the impact on children and the stress levels of individuals. We meet people in that situation all the time. One particular afternoon, as I recall, three men came to see me in quick succession all saying they intended to kill themselves. They were absolutely distressed to the point where they had no hope and could see no way out.

The idea behind this proposal is not to rubbish what the Government is doing. Our message is that good things are being done but we must go further. The motion is prescriptive about what is needed. The bottom line is that we can do better and must do better for the citizens who are at their lowest ebb and are relying on the Government to come up to the mark. That is what the motion seeks to achieve.

I compliment Deputy Stephen Donnelly on bringing forward these rational and logical proposals. They offer practical measures to resolve the greatest scourge facing people in recent years. We have not seen the likes of this catastrophic situation in any facet of Irish life. It is a problem that is spiralling out of control at a rapid pace and affecting thousands of people. Up to 117,000 families are in mortgage arrears, with an additional 35,000 buy-to-let mortgage holders in the same predicament. The number of repossessions is surging, with recent Central Bank data indicating that the banks are immediately threatening 31,000 home owners with the loss of their properties. There are up to 1,000 repossession cases coming before the courts every week, in locations throughout the country. This situation is set to escalate in the coming months if the current trend continues.

Threats to take people's home make up to 40% of the solutions the banks are proposing as part of the targets set for them by the Central Bank for dealing with the arrears crisis. These home owners are, by and large, the victims of a very much unregulated and uncontrolled market in which the banks were the reckless instigators. Those institutions are responsible for perpetrating the current situation, which has an enormous social cost. Of course, these are the same lenders which were bailed out by the already overburdened and victimised taxpayers and have now been reincarnated as wolves in sheep's clothing. We are effectively seeing a return of the bailiffs who were part of Irish life in an earlier era. The threats of evictions and actual evictions that were so prominent a part of our history are again a feature of daily life.

The banks are acting ruthlessly in their application of the repossession process and are robbing people of their dignity as well as the roof over their heads. In most cases, indebtedness is not the fault of the home owners. Many people in arrears have lost their employment and are dealing with extremely stressful circumstances. There is often a high rate of illness and family breakdown. Every Member of this House will be aware of that from meeting people in their constituency clinics. We are seeing, on a weekly and daily basis, terrible cases where people have been dealt with very harshly and are suffering greatly.

At the same time, the banks are crucifying variable-rate mortgage holders to make up for losses in other parts of their business. Some lenders are even giving new customers a lower rate than that being charged to existing variable-rate mortgage holders. Bank of Ireland, Permanent TSB and KBC Bank exemplified this policy when they recently cut their main variable rates for new mortgage applicants but not for existing customers. This is another example of harsh treatment and it is very demoralising for struggling borrowers stuck with variable-rate loans. The Central Bank, meanwhile, is standing off on the sidelines and allowing it to continue. It is not enforcing the statutory customer code that requires the banks to give fair and equal treatment to all their clients. The Government must act with speed to address this issue. The Minister for Finance needs to work with the Governor of the Central Bank and engage directly with the banks to secure an immediate lowering of the standard variable rate for existing mortgage holders. There is a huge disparity between the rates being charged in the Irish market and those pertaining in other eurozone countries. In fact, there is anything in the region of €3,000 to €4,000 of a difference in what is being charged on an annual basis.

The banks are back to making huge profits and are paying hugely reduced interest rates on the money they borrow. Unfortunately, this is not being passed on to customers. Given that the European Central Bank rate is at a record low of 0.05%, it is imperative that the unsustainable rates being imposed on variable-rate mortgage holders in Ireland are dramatically reduced. This debate will give the Government leverage to take action with urgency. Thousands of home owners cannot sleep, eat or function in a normal manner because of the stress they are under, with serious negative effects for their health and well-being.

A precedent has been established with the setting up of the Strategic Banking Corporation of Ireland in the past five or six weeks with Government support and funds are being channelled through Bank of Ireland and Allied Irish Banks. It was set up to kick start small businesses, which is very welcome. Money is being extended and made available at less than half the current rate at a rate of 2%. A typical five-year loan of anything up to €400,000 is likely to cost a small and medium enterprise €15,000 to €20,000 less than the current market costs over the lifetime of the loan, which is very welcome. If the banks and the Government can facilitate small and medium enterprises, there is no reason they cannot extend that facility to the domestic market in light of the current circumstances. I am sure the Governor of the Central Bank, Professor Honohan, would agree with and approve of that proposal.

I mentioned the word "urgent" in this respect and at this stage for many people it has come down to the wire. People are suffering ill health and are in dire straits. This crisis is affecting them and causing family breakdowns, and that is only the tip of iceberg if the current process is going to continue. It has devastated lives and families and pushed many people to the brink. They are frightened and disillusioned and perceive there to be a cosy relationship between the Government and banks. I would hate to think that perception would be allowed to exist, and I am sure that no one on either side of the House would want that perception to continue to exist. There is a need to ensure that from tonight drastic and urgent action is taken at speed.

I move amendment No. 1:

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


— that the level of mortgage arrears is a significant economic and social challenge and the Government is aware of the difficulties some homeowners are facing in meeting their mortgage commitments;

— that the Government has already taken decisive action to address the mortgage arrears challenge and is committed to continuing to address this issue as a priority;

— that the resolution of mortgage arrears continues to be an ongoing issue which is being addressed by a range of different Government and financial institution-led initiatives;

— that the Statement of Government Priorities 2014-2016 recognises that high levels of personal debt continues to threaten to exclude thousands of individuals and families from the recovery, and commits to the completion of a review of the implementation of the Central Bank’s mortgage arrears targets and the operation of the Insolvency Service of Ireland (ISI), and to the strengthening of the independent advice service offered to distressed borrowers;

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

— that the six institutions subject to the Central Bank’s Mortgage Arrears Resolutions Targets (MART) reported that by the end of Quarter Four 2014 they had met and exceeded the MART targets set by the Central Bank of Ireland (CBI);

— that the aggregate number of principal dwelling houses (PDH) accounts in Ireland in arrears over 90 days is continuing to fall and reduced by 7.4% during Quarter Four 2014;

— that the number of PDH accounts in arrears over 720 days remains a challenge, although Department of Finance February 2015 data showed that numbers of cases in this category declined month-on-month for the six banks covered by MART; and

— the low level of take-up of ISI services during last year;

acknowledges policy interventions that have been undertaken, including the:

— Personal Insolvency Act 2012 and subsequent waiving of ISI application fees in 2014;

— Code of Conduct on Mortgage Arrears (CCMA);

— Mortgage Arrears Resolution Targets (MART);

— provision of the Mortgage Arrears Information Helpline;

— provision of independent financial advice for borrowers on the terms of restructure arrangements offered to them by their lender; and

— provision of the mortgage-to-rent scheme for eligible candidates and recent changes to simplify the property valuation process;


— the 22.7% reduction in total PDH mortgage arrears levels from a peak of 142,892 accounts in June 2013 to 110,366 accounts, as indicated by the CBI December 2014 mortgage arrears data;

— the fact that engagement between borrowers and lending institutions has resulted in almost 115,000 sustainable restructure arrangements being put in place, as also indicated by the CBI December 2014 data;

— initiatives by lenders to provide borrower-focused debt restructuring solutions; and

— the improving take-up of ISI services in 2015 and the fact that the majority of ISI solutions result in successful outcomes for the borrower, as evidenced in the ISI statistical bulletin for Quarter One 2015;

notes that:

— the Government has put in place a broad strategy to address the problem of mortgage arrears and family home repossessions which has included an extensive suite of interventions designed to address the problem including specific Central Bank targets for the banks through the Mortgage Arrears Resolution Targets, the Code of Conduct on Mortgage Arrears, extensive recasting of the personal insolvency legislation, the provision of advice through Department of Social Protection-led initiatives and the mortgage-to-rent scheme; and

— given the personal distress caused by over-indebtedness, the effective management of the mortgage arrears issue remains, however, a policy area, by necessity, under continuous review and that more and concerted action by the banks can be undertaken to assist customers in arrears and to improve the uptake of personal insolvency solutions; and

calls for:

— the Government to continue, and intensify, its work across the relevant Departments and Government agencies to consider all options to strengthen the mortgage arrears framework in order to ensure that families can, where possible, remain in their home and to encourage all lending institutions to work with it to deal with the mortgage arrears problem, with a view to making an announcement on this issue in the coming weeks; and

— a Government announcement that will focus on initiatives aimed at reducing the number of mortgages in long-term arrears and will seek to facilitate borrowers remaining in their homes wherever possible."

I acknowledge the approach taken by the Technical Group in the motion. The tone, in particular, is conversational. While we have the jargon with respect to the technical nature of mortgage arrears and many new acronyms have been introduced in the past four years, we are all on the same page when it comes to the human stories behind these difficulties. I commend the Technical Group in that respect.

The Government resolved to tackle the mortgage arrears issue head on and significant progress has already been made. We have prioritised actions to deliver real and sustainable solutions to borrowers.

There is no doubt that some families across the country are experiencing genuine difficulties in meeting their monthly mortgage repayments. The Government is fully aware of the impact that this is having on these families and their lives and continuously reviews the implementation of the various strands of mortgage arrears policy with a view to identifying ways to alleviate undue stress on indebted householders.

Addressing personal indebtedness is essential as our economy returns to strength. Since taking office, the Government has put in place a broad strategy to address the problem of mortgage arrears. This has included an extensive suite of interventions including specific Central Bank targets for the banks through the mortgage arrears resolution targets, MART, the code of conduct on mortgage arrears, CCMA, extensive recasting of the personal insolvency legislation, the provision of advice through Department of Social Protection-led initiatives and the mortgage-to-rent scheme which is designed to assist borrowers in an unsustainable mortgage position to remain in their homes through the involvement of social housing agencies.

Overall, I can agree with the sentiment of much of what the Technical Group has proposed, and I believe that current Government policy in this area is founded on these objectives, in particular, avoiding repossession of the family home where possible. The Central Bank's 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.

The Central Bank publishes comprehensive data on mortgage arrears on a quarterly basis. Its most recent publication was in March 2015 and covered data to the end of quarter 4 of 2014. This showed that the number of mortgage accounts for principal dwelling houses in arrears continued to fall, marking six consecutive quarterly declines.

According to data published by the Central Bank, at the end of 2014 there were 758,988 mortgage accounts outstanding. Of these, 648,622, or 85%, were not in arrears. It should be noted that the number of accounts does not directly translate into the number of homes as some properties have more than one mortgage outstanding on them. It has been estimated that the rule of thumb is that there are 1.3 mortgages to a property.

The number of principal dwelling houses accounts in arrears totalled 110,366 at the end of 2014, down from a peak of 142,892 accounts in June 2013. Of these accounts, at the end of 2014, 78,699 were in arrears of more than 90 days. While the arrears over 90 days remain high, they are down from a peak of 98,736 accounts at end September 2013. Indications are that the fall-off in numbers in arrears will continue. There are over 37,000 accounts with arrears of over two years. Based on the rule of thumb that there are 1.3 mortgages to every property, it can be estimated that the 37,778 accounts with arrears over two years relates to approximately 30,000 properties.

The published data also clearly show that many customers are finding solutions when they engage with their lender and the evidence to date is that restructures can be a very effective solution to the problem of mortgage arrears. In March 2013 the Central Bank set targets to require banks to take steps to progress the resolution of mortgage arrears on a sustainable basis. The Central Bank has reported that the banks continue to meet or exceed the MART set for them.

Central Bank data indicate that almost 115,000 principal dwelling houses mortgage accounts have been restructured - some of these may not have been in arrears - that is, almost one in seven mortgages have been restructured. Over the course of 2014, there was an increase of over 30,000 in the number of accounts that have been restructured. I am sure we can all agree that it is good news that such a significant number of mortgage accounts have been restructured and consequently large numbers of borrowers are able to remain in their homes.

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, MARP, or with the CCMA. These efforts can only achieve positive results in circumstances where the borrower co-operates with the lender and engages with the process. 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 MARP process has concluded and where legal proceedings have commenced, the Central Bank's code requires that a lender must continue to maintain contact with the borrower, and-or his nominated representative, periodically to see if an alternative repayment arrangement can be agreed even at that late stage. The CCMA is an important consumer protection mechanism and monitoring compliance with the CCMA continues to be a core part of the Central Bank's work programme. The Central Bank will continue to conduct on-site inspections of a number of mortgage lenders this year, as it did in 2014.

It is important to remind Deputies that 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 in relation to 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, PIA, proposal. In formulating a proposal for a PIA, 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.

However, this mechanism has not been widely used to date so it may be necessary to raise awareness about it with borrowers in advance of a repossession hearing.

It is important to repeat that the strongly held 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 be considered only as a last resort. Every effort should be made to agree an acceptable arrangement as an alternative to repossession. I believe the CCMA and MARP processes which I have outlined provide a strong framework to ensure this happens. Regretfully, however, it must also be accepted that due to individual circumstances, not all mortgages can be made sustainable and that in these limited circumstances, it will be in the best interests of both parties to resolve the situation in a fair manner.

The motion mentions mortgage to rent which, as Deputies will be aware, was introduced 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 those low income families whose mortgage situations are unsustainable and where there is little or no prospect of a significant change in circumstances in the foreseeable future. The scheme ensures that families remain in their homes while ownership is transferred to an approved housing body which, in turn, rents it to the original owners. Eligibility requirements are in line with other forms of social housing support. Up to the end of 2014 almost 70 cases have been completed which means those families have not had to move out of their homes. A review of the scheme was recently carried out by the Housing Agency on behalf of the Department of the Environment, Community and Local Government. The review has 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. In an effort to increase the numbers delivered under the scheme a new protocol between all parties in the process was agreed and came into operation in June 2014. The aim of the new protocol is to address acknowledged delays in the mortgage to rent process. Borrowers will be involved from the outset of the process and will be requested to give their consent to the sharing of their full information at the start of the process. This will ensure there is no ambiguity for stakeholders. The protocol includes a single independent valuation for the purpose of agreeing the purchase price, which should reduce price negotiation times. The valuation and condition surveys will be carried out earlier in the process to give more certainty to all parties, including the borrower. The Department of the Environment, Community and Local Government has targeted the completion of 250 mortgage to rent transactions during 2015.

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 who are being presented with long-term mortgage resolution proposals by their lenders. The Mortgage Arrears Information and Advice Service, MAIAS, was established to provide a comprehensive and co-ordinated approach to assisting people in mortgage arrears or pre-arrears in assessing their options. The service has three elements, the first of which is the website which is maintained by the Citizens Information Board and was developed as the key online access portal for general mortgage information advice. The website was launched in June 2012 and to date there have been almost 350,000 visits to the site. The second element of the service is the mortgage arrears information helpline established in August 2012, which provides general mortgage arrears information and signposting relating to the CCMA and othersupports available for those in mortgage arrears or pre-arrears. To date the helpline has dealt with over 13,000 calls. The third element is the service to provide independent financial advice to mortgage holders who are being presented with long-term mortgage resolution proposals by their lenders which was launched in September 2012. Advice is provided by a panel of accountants drawn from members of the main accountancy institutes in Ireland. A county by county panel with more than 1,500 participating accountants is in place and their contact details are available on the website. Borrowers are free to choose their own adviser from this panel and the lender will pay €250 to the accountant of the borrower's choice for the provision of independent financial advice. At the end of the fourth quarter of 2014, 1,509 borrowers had availed of the independent financial advice service.

I wish to emphasise the Government's determination to ensure that the personal insolvency legislation and support structures can work effectively to support a return to solvency for borrowers who are struggling with unsustainable debts. As I mentioned earlier, the Government's priority is to ensure that where an individual's debts include mortgage arrears on a family home, repossession is the last resort where all other avenues to resolve the arrears have been properly considered by the lender and have been exhausted. The Government is considering all options for improving the effectiveness of the range of solutions available to a person who is trying to resolve unsustainable debts, including the option of changes to bankruptcy.

The Insolvency Service of Ireland, ISI, established in 2013, has now been in operation for more than a year. While activity levels were lower than expected, significantly higher levels of applications have been evident since the launch of the "Back on Track" campaign in October 2014, which included the waiving of all ISI application fees. During 2014, 547 approved arrangements were concluded, including 251 debt relief notices, 97 debt settlement arrangements and 199 personal insolvency arrangements. The ISI reports that 75% of proposals are being supported by creditors. In addition, there were 448 bankruptcies in 2014, almost eight times the number in 2013. The fact that the ISI is now in place has acted as a catalyst and has encouraged debtors and creditors to reach bilateral deals to address their insolvency. In the absence of bilateral agreements, the new statutory frameworks are a mechanism requiring all relevant creditors to engage with and respond to an insolvency arrangement proposed by a debtor.

We are glad that the Technical Group shares the concerns of the Government regarding the level of family home repossession cases before the courts. The Department of Justice and Equality has indicated that the number of applications for repossession civil bills remains high but has levelled off following a sharp peak in quarter two of 2014. The number of repossession orders granted by the courts, however, is currently rising due to applications working their way through the system. As I have said already, 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 MARP or with the CCMA. For this reason, I would strongly encourage borrowers who are in a serious debt situation to seek independent professional advice through the Money Advice and Budgeting Service, MABS, or through the ISI in the first instance. That said, all lenders have indicated a willingness to engage with their borrowers at any stage of the process, even when the issue is before the courts. In fact the low level of repossessions we are seeing is related to the adjournments being sought, in many instances, by financial institutions as borrowers at that point are engaging. As we all know, more than 115,000 mortgage accounts have been restructured already and the majority of borrowers are able to adhere to the new arrangements and stay in their homes.

The Minister of State indicated that he is sharing time with Deputies Twomey and Cannon and his time is now up.

In conclusion, the Taoiseach's Department is co-ordinating the work of all of the other Departments and there will be a new mortgage arrears policy initiative in a matter of weeks. I hope that the contributions to this debate will add value to the development of policy.

It has become clear during the course of the discussions of the Joint Committee of Inquiry into the Banking Crisis that reckless lending and reckless Government policy from 2002 to 2008 were at the root of the crisis that we are still talking about in 2015. The horrible legacy of that reckless period will be with us for some time to come. While it is easy to throw around figures, one must ask what it is all about. There were 1,500 repossessions approved in the Irish courts last year. That means that family homes were handed back to the banks by 1,500 families in 2014. Some of those repossessions came about because of marriage break ups while others were the result of arrears built up because of job losses. Unfortunately, repossessions will continue for the foreseeable future because of the extent of the crisis and that is very regrettable. It is very difficult for every single person who loses their home. We all know people in this situation; they are in our communities.

It is shocking to see what has happened. I am glad the tone of tonight's debate is not about confrontation across the floor. There is an acknowledgment that we quickly need to find solutions that work for families.

Work has been done over the course of the Government's lifetime, including work with MABS, reform of the banks and the insolvency legislation. However, I agree that not enough has been done. As the Minister, Deputy Noonan, made crystal clear today we want to have a Government in 2018 that bears no resemblance to the Government of 2008 and the legacy it left behind. We just cannot afford to put the citizens of this country through that sort of hardship and crisis again. It is time for us to deal finally with this issue.

Some 30,000 people are going through the courts at present. That is not 30,000 repossessions but 30,000 people who are in the courts. We need to get people to engage. Why do people not engage? Much of the conversation we have heard in recent years is that the banks will only turn them over anyway and kick them out of their homes. That is not what we want to hear. We want people to engage with the banks. We want to hear what the banks are saying to them and we want to be able to work with those people. While the number of families would be lower than 30,000 it is a significant number with probably more than 25,000 families suffering anguish. When these types of financial problems hang over people who might not know if they will have their family home in one, two or three years it brings an incredible stress to the dynamics of any family. It brings tremendous mental health problems to the people involved and the stress is unacceptable. We need to focus our minds in this issue. It is important that we have turned our economy around. If we were not creating jobs, more people would be going into arrears and losing their homes at a fierce rate. If we were not growing the economy and had not stabilised the crisis, it would not help the people who are still paying their mortgages. Some 85% of people with mortgages are still making their repayments, many under huge strain to make those payments every month. In particular the people with variable mortgage rates are having a hard time paying at the moment.

We need to ensure we get the issue of mortgage arrears off the agenda. We need to do our absolute best to help these people. I am delighted the Taoiseach announced a few weeks ago a strong co-ordinated effort. It goes back to the report mentioned earlier where all members of the Joint Committee on Finance, Public Expenditure and Reform made it clear that this is very important for all of us. This is not just a Government, Fianna Fáil, Independent or Sinn Féin issue; this is something we all feel very close to our hearts. We want to see a solution that will work for everybody.

Previous speakers have pointed out a number of actions we need to take. The mortgage-to-rent scheme is very important. However, the trouble is that many of the banks do not want to become property developers or property companies. We must find innovative ways to look at other companies that are fair and reasonable, and may have an Irish dimension to them that are quite happy to manage properties on behalf of the State and where the banks can reach agreements with them to manage these. Many of these properties are not saleable in the truest sense of the word. They are not in large urban areas or in high street areas. They may be out in the country, on the edge of towns or in unfinished housing estates. We need innovative ways to deal with the issue.

For instance, many of the people who have given up their homes voluntarily cannot go on a council housing waiting list, which is ridiculous. We need to allow people who give up their homes voluntarily and who make an agreement with the bank to write off the residual debt an opportunity to make a fresh start. That is what we all like to do if we make a big mistake in our lives. We do not need to beat people up for the rest of their lives because they got caught up in a crisis that was not of their making in many respects. We need to give them the opportunity to start again. We must make that pathway easy.

As Deputy Catherine Murphy said earlier, houses may not be available in a particular area but at least they should be given the opportunity to get on the housing list to get some of the benefits the Government can give to help them house their family and have the dignity that is brought about by living in their own family home without this huge financial burden sitting on top of their shoulders weighing them down for the rest of their lives and having that huge negative impact on family members, especially children. That is why I am delighted the Taoiseach and the Ministers involved are making a strong and cohesive effort to sort the issue out. We should give them our full support.

From 2007 to 2011 the property price crash combined with the loss of more than 250,000 jobs left many of our home owners floundering in the waters of a national mortgage crisis. While 85% of Irish mortgage holders are now successfully making their mortgage repayments, in some cases at significant personal sacrifice, the Government has worked hard since 2011 to throw a very important lifeline to the remaining 15% who have found themselves stranded in those outgoing tides. Thankfully we are now beginning to see the fruits of that work.

Latest figures from the Department of Finance indicate that 71 home owners came out of mortgage arrears every day throughout 2014. Just under 115,000 mortgage accounts were classified as restructured at the end of 2014, which represents an increase of about 30,000 accounts in the course of that year. In the vast majority of cases, real solutions tailored to the needs of borrower are available when genuine engagement takes place between the borrower and the lender. Slowly but surely, these solutions are beginning to work.

Over the past year in my offices in Gort, Loughrea and Athenry, and across east Galway, I have seen a steady decrease in the number of calls I am receiving about mortgage arrears. When people, who are in that difficult place, call, I can refer them to a range of options that are now available to deal with borrowers in distress. The code of conduct on mortgage arrears requires a lender to explore all the options for an alternative repayment arrangement with a co-operating borrower. From my experience of assisting constituents in dealing with lending institutions, the vast majority of them are adhering to this code of conduct and are working with distressed borrowers to find sustainable mortgage solutions.

If it is agreed that a mortgage restructure is not a sustainable solution, alternative arrangements, such as the mortgage-to-rent system, are available to allow a debtor to remain in his or her home in appropriate cases subject to social housing eligibility. None of these solutions would be possible without the large dedicated teams put in place by the lending institutions to engage effectively with distressed borrowers.

The establishment of the Insolvency Service of Ireland was another important milestone in addressing cases of over-indebtedness. While the initial uptake of that service was low, thankfully it is now improving. The Government wants the numbers of people availing of this service to increase, as it is one of the most important parts of the package of solutions available to distressed borrowers. The vast majority, approximately 75%, of proposed solutions are being supported by creditors and lenders.

When people find themselves worrying about mortgage arrears and potential repossession of their home, all of us in this House and members of the media need to be exceptionally careful in the use of language around this challenge. I am not making any accusations about the Members opposite. However, phrases such as "a tsunami of repossessions" or describing 2015 as "the year of repossessions" do nothing to assist anyone. Those soundbites only lead to further and often unnecessary worry and distress on the part of home owners.

Professor Seamus Coffey recently carried out an excellent analysis of the mortgage crisis. It indicated that since the crisis started there have been only 1,000 court-held repossessions, which is a remarkably small number of the total number of about 750,000 mortgage holders. In most instances of court action on behalf of the lender, the commencement of that court process is not a signal that a repossession is about to occur. It may often be the case that the process then prompts the borrower to re-engage with the bank to find a lasting and sustainable solution.

More often than not, these cases are adjourned to allow both parties the time to find a sustainable solution and to remove the bank and the borrower from a lengthy legal process. When representatives from AIB appeared before the Joint Committee on Finance and the Public Service recently, they explained clearly that for any of their borrowers to appear in court meant they had not engaged or made any repayments to the bank over a number of years.

It is important to note that 85% of Irish mortgage holders are successfully paying their mortgages and 71 home owners got out of mortgage arrears every day last year. Out of 760,000 mortgage holders in Ireland, only 1,000, or less than 0.25%, have had their homes repossessed in court. Every member of this Government is listening to people's problems on a daily basis. We are acutely aware of the difficulties that families face in dealing with mortgage arrears. That is why we have put in place a suite of policy approaches to assist such people. These approaches are beginning to work. However, these policy approaches cannot be static because they need to evolve as circumstances change. As we speak, the Taoiseach and his officials are refining the policies to make them even more effective in assisting those who urgently need our help. We also need to engage with all of our lending institutions to ensure they continue to treat distressed borrowers in a fair and equitable manner. It is through this range of policy approaches that lasting solutions will be found for all of our borrowers.

I commend Deputy Donnelly and his colleagues in the Technical Group on proposing this motion, which gives us another opportunity to debate the issue of mortgage arrears and the barriers to sustainable solutions. This is a balanced motion and while I would change some words here or there, I fully agree with its broad thrust. It is timely that we are debating this issue as we await the Government's announcement of a package of measures to deal with mortgage arrears.

The motion correctly highlights the lack of financial expertise and legal representation available to borrowers. When I am contacted by constituents and other people from all over the country about mortgage arrears, they are usually unaware of the information helpline or of their entitlement to advice from an accountant when an offer is made by a bank. That issue must be addressed in the Government's forthcoming package of measures. Not only are people generally aware of their rights, these rights are too limited. When banks have endless resources to put forward solutions, we need to ensure that borrowers also have access to financial expertise and legal advice, as well as legal representation where necessary.

There is a lack of consistency in the offers being made by financial institutions. Deputy Donnelly has highlighted this issue on a number of occasions. I have experience of these cases, having gone through the standard financial statement form with borrowers and dealt with the banks. Sometimes I cannot understand the reason for banks' approaches. I have observed proper restructuring arrangements in some cases and entirely different approach to others even though the facts appear to be similar. The Central Bank should be more prescriptive in defining the elements of a sustainable solution and the circumstances to which they would apply. The key requirement in the mortgage arrears target programme is that the bank must be satisfied that it is proposing a sustainable solution. It is up to the bank to decide whether, for example, a split mortgage with interest on the warehouse portion is a sustainable solution for a borrower. It can say it has complied with the code of conduct on mortgage arrears and the target programme, and there is nowhere for the borrower to turn. Sustainable solutions should be defined from the point of view of the borrower.

The issues arising in respect of the Insolvency Service of Ireland have been extensively discussed. I hope the Government's reform of the service is as radical as necessary because while the numbers are improving, they are not coming anywhere close to meeting the Government's expectations, let alone meeting the needs of borrowers. It should be empowered as an independent agency to make the final decision on the restructuring of secured debt. That would require a complete removal of the banks' veto. We are hearing from Government sources that the veto will be diluted in some form. We will await the details of this but the issue needs to be addressed. The number of repossessions is growing and the mortgage-to-rent scheme is hopelessly inadequate. Only 88 schemes have been completed under the scheme thus far. It is hopelessly bureaucratic and it involves too many bodies. It is a nightmare to progress an application from one stage to the next. The process will have to be reformed and streamlined if it is to become more efficient and faster. The eligibility criteria also need to be changed.

The Government rightly welcomed the reduction in the number of mortgage accounts in arrears but many of these cases are simply being reclassified as solutions that are yet to be properly tested. If an arrears capitalisation arrangement is put in place, it will be some time before it is clear whether the arrangement is sustainable. It is worrying that more than one quarter of restructuring cases involve the simple addition of all of the arrears onto the mortgage balance, spread out over the remainder of the term. The statistics indicate this is one of the least effective solutions. It has worked in only 71.3% of cases. I suspect that the figure will decline even further because many of the cases that have recently been put on arrears capitalisation will find the payment unsustainable over time. In contrast, the split mortgage arrangement is quite successful, with a success rate of almost 96%. However, it is still early days for many cases involving split mortgages. The Government and the Central Bank should intervene directly to end the practice which Bank of Ireland, in particular, is pursuing of charging interest of 2.5% on the warehoused portion of a split mortgage. Charging interest on the warehouse portion makes no sense if one is trying to separate what a borrower can repay from what he or she cannot afford. It is not fair that a customer of AIB or Permanent TSB is offered a certain treatment of a split mortgage solution endorsed by the Central Bank whereas a customer of Bank of Ireland is given an entirely different treatment of that same solution.

This is inconsistent and will result in unsustainable restructuring being put in place for some mortgages. The sweetest working solutions must be enhanced, their terms streamlined and there must be greater consistency in their application. We also need certainty in regard to residual debt, because this is one of the barriers for some people in regard to acknowledging the inevitable. I accept that some mortgages are completely unsustainable. However, in all cases where a solution is agreed with the borrower that involves the loss of ownership of the home, the treatment of the residual debt should be agreed up front.

I wish to touch on some other issues relevant to this debate. One of these is the fact we are in a low interest rate environment from which thousands of tracker customers are benefitting. The mortgage arrears situation would be far worse if we had an environment of high ECB interest rates. The current ECB rate of 0.05% will not last forever, although it will probably last for some time yet. However, this will not continue indefinitely. We need to factor this into how we plan to deal with the mortgage arrears situation.

The standard variable rate issue contributes to the level of mortgage arrears. The fact people are paying from 4% to 4.5% in interest is an issue which has been well ventilated in this House and at the Joint Committee on Finance, Public Expenditure and Reform. This is directly contributing to the high level of mortgage arrears we have and any solution must address this. It is little remarked upon that mortgage interest relief is due to end completely at the end of 2017. Currently, this provides tax relief of approximately €250 million per annum to approximately 500,000 mortgage holders. When this relief ends, people will see a net increase in their monthly mortgage repayments. We need to deal with this issue.

In its reform of the mortgage to rent scheme, the Government urgently needs to extend the tenancy protection service which operates between Threshold and the Department of Social Protection for those who are renting. The protection scheme exists currently in Cork and Dublin. I know of cases where it has worked and I wish it well. However, the scheme needs to be extended to other cities and major urban areas. I am sure the Minister of State is aware from his own city of Waterford that rent caps have been far outstripped by market rents. This is the case in Cork by a country mile, where a couple with two kids is expected to find a property with a rent of no greater than €725 per month. The truth is they would be doing very well to find a property for even €1,000 or €1,100 in the urban areas, not just in the city but in the satellite towns around Cork city.

I noted what Deputy Cannon said on the issue of repossessions. It is not often recognised that for every home repossessed by way of a court order, a further three family homes are lost by way of voluntary sale or surrender. Therefore, it is grossly inadequate and inaccurate to use the yardstick of repossessions by court order as the measure of the loss of family homes. The statistics from last year give a ratio of 3:1 of homes that were lost through voluntary surrender, abandonment or through a voluntary sale as opposed to through a court order. This issue should be highlighted.

The Opposition is not exaggerating this problem. The recent report from the Central Bank on the mortgage arrears targets programme confirms in black white, in table 2 of the report, that of the solutions proposed by the banks, the loss of ownership would be the outcome in 30,904 cases. The report stated that in respect of family homes, principal private dwellings, there were 16,683 concluded solutions. I know this does not equate to properties that have been repossessed, but it is a statement of intent. It is clear that where the banks arrive at that conclusion and unless there is a radical change, these homes will be lost. One of the major flaws in the mortgage arrears targets programme brought forward by the Government was allowing the banks to use the threat of legal action or the initiation of legal action as counting towards the sustainable solution targets. This made a mockery of the entire process and should be changed.

An issue that is rarely mentioned is the issue of buy-to-let property, where the level of arrears is much higher at 25%. For obvious reasons, there is little political appetite to discuss the situation of arrears in this sector. However, this issue has a direct impact on the rental market, because if we do not put sustainable solutions in place for buy-to-let properties, many of those properties will be foreclosed upon by the banks and sold. In the current environment, those properties are more likely to be bought by owner occupiers than by investors, thereby putting a further squeeze on a rental market that is already out of control. It is in the interests of the economy and society that sustainable solutions are put in place in respect of these properties.

On the issue of family home mortgages and their restructuring, it is interesting that the Central Bank breakdown of solutions shows no heading for write-downs, but this is a solution that should be used. A variety of solutions are being put forward under mortgage-to-lease and other headings, but I suggest the banks have been well capitalised by the State and by two successive Governments and that they have adequate capital, as has been confirmed independently by the ECB, to deal with the mortgage arrears crisis. They need to deal with the issue and need to do so by putting in place the solutions that have been confirmed by the Central Bank, including split mortgages and the write-down of mortgage debt. There should be no need for a second round of transfers from the State to the banks, either directly or indirectly, to deal with mortgage arrears. They have more than adequate capital and it is about time they stepped up to the mark and dealt with the issue.

Ba mhaith liom fáilte a chur roimh an rún seo agus ba mhaith liom buíochas a ghabháil don Grúpa Teicniúil as é a fhoilsiú.

It is mind-boggling that despite four years in government, Fine Gael and the Labour Party continue to fail struggling families. As of last month, there were some 7,100 civil bills for repossessions throughout this State, some 564 of which were lodged in my county of Meath. Behind each one of these is a real family with a story. It is impossible to over-emphasise the fear, worry and stress tens of thousands of families are experiencing in their daily lives because of this issue.

A home is a primary need. If people do not have a home, it is difficult for them to have the other necessities for a good quality of life. It is difficult for families to ensure the education and mental health of their children are at optimum levels. It is difficult to maintain their physical health. Many people who have come to my office in mortgage distress have indicated their lives are starting to fall apart as a result of this issue. Time and again Sinn Féin has raised the issue of the urgent need for struggling borrowers to be provided with independent financial expertise free of charge by the banks. In many instances, the banks are not dealing with people with mortgages honourably.

The cases of approximately 100 people dealing with mortgage distress are on my books currently. Some of the banks are dealing correctly with these people. AIB is one of the better banks in this regard. However, banks such as Permanent TSB have a chequered record. Some staff do amazing work, but others seem to take a lackadaisical call centre approach. One pensioner couple I know has tried to engage with the bank at every stage, but this couple has had to deal with approximately ten different people, all of whom have delivered different information and gathered information inconsistently. Some of this information has been incorrect and some of it has stalled the process and jeopardised a resolution.

This family was told they were not suitable for the particular solutions, although they were, and they were told to submit standard financial statements. Although they did so, it is alleged they were never received. When the family went to the financial services ombudsman, legal processes were initiated that had the effect of stopping the ombudsman from investigating the complaint.

I know a Meath farmer in his late fifties who bought a house in Mayo with a view to doing it up, moving to the property and selling his own house. His finances went into a dive in a very short period. He went into four months of arrears, amounting to €2,000, and his house was forcibly sold, leaving a debt of €80,000. It is absolutely unacceptable that a bank would partake in such activity. I know another businessman who went into serious debt and, outside the mortgage distress area, did his best to negotiate with the banks so that the jobs and business could be saved. I called the bank and asked if he could negotiate with officials but they indicated they would accept only written offers. The bank said "No" to all the offers he delivered. This businessman alleges that his debt has been sold to a third party for less than the offers he made. I ask the Minister to investigate those allegations.

We support the proposition of the motion that we need a definition of what constitutes a sustainable solution from the borrower's perspective. The reality is that the Central Bank holds a view that there is a strong pipeline of sustainable solutions. The Central Bank's supervisory engagement on mortgage arrears update published earlier this month noted that relying on quarterly solution targets across all banks is no longer appropriate. As a result, it has written to each bank, setting out new requirements, concluding that sustainable solutions should be in place for the majority of distressed borrowers by the end of 2015. To my mind, the fundamental problem with the existing definition of a sustainable solution is that it is far too wide and it allows a bank, for example, to count an eviction as a solution. That is regardless of the cost to the family or State.

The Minister for Finance has told us he is opposed to the use of evictions as a solution and the cross-party report of the Joint Committee on Finance and Public Expenditure on the mortgage arrears resolutions process set out a number of sustainable recommendations to support struggling mortgage holders. As is often the case, this Government's actions do not match its words. As a result, back in the real world banks are still allowed to treat legal actions as solutions. Likewise, positive measures in the Central Bank's code of conduct on the mortgage arrears suite of solutions languish as the banks are under no obligation to offer them. They can pick and choose the approach that suits their strategic interests.

We support the Members' call on the Government to amend the personal insolvency legislation to reduce the bankruptcy period to one year until the mortgage arrears issue is resolved. This would bring us into line with the Six Counties and simply rebalance the relationship between the mortgage holder and the bank. Through this entire process, the problem has been that the power firmly lies with the bank. So far, we have had a Government of the banks, for the banks and by the banks. We must ensure that at the heart of the Government's approach is the citizen. We agree that the Insolvency Service of Ireland should be empowered and that the courts should consider its proposals. This month, the Central Bank issued instructions for full and appropriate engagement in the process as set out in the Personal Insolvency Act 2012. It is clear as the nose on one's face that this legislation falls far short of what is required to rebalance the relationship.

Land and conveyancing legislation should be also amended. My colleague, Deputy Pearse Doherty, introduced an amending Bill last year which the Government roundly rejected. We proposed empowering the courts to consider any proposal from the home owner in making a decision on repossession. The legislation explicitly dealt with the issue of residual debts and placed the cost of the process on the bank. We also support processes such as the mortgage-to-rent scheme, but examples of this are as rare as a hen's teeth. I spent the past two to three years sitting down with families in massive distress going through the process of the mortgage-to-rent scheme but, in reality, it does not exist for such people. Representatives of AIB came before a committee last week and told us the bank has processed zero mortgage-to-rent scheme cases fully so far. We are four years into this and the State bank has processed zero mortgage-to-rent scheme cases, which is an example of the lack of urgency that this Government has demonstrated in this crisis.

Since this Government took the reins of office, there has been a consistent strand in its strategy in dealing with mortgage distress. It has taken a hands-off approach in dealing with the banks and, as a result, it has facilitated the banks' unjust treatment of struggling home owners, including repossession of the family home. Just a few weeks ago, the Irish Mortgage Holders Organisation warned that the country was "sleepwalking" into a repossession crisis. Research provided by the economist Seamus Coffey indicates that repossession orders issued had more than quadrupled in the first nine months of 2014, compared with the same period in 2013. If the Government means business and the home owner, citizen and struggling family is at the centre of the Government's policy and process, it must take the bull by the horns. If the Government fails to do so, we will have a tsunami of repossessions that will lead to a massive housing crisis. We already have a significant housing problem but this is likely to exacerbate this two-fold or three-fold.

Last Christmas this House was enflamed by the tragic death of a homeless individual a few metres away from Leinster House. As of today, my county council has not received any funding for the building of houses to deal with the 700 families who have made their homelessness apparent to the council recently, or the 4,000 people on the homeless list. We must ensure this human crisis is tackled properly and that the relationship between the mortgage holder and the bank can be rebalanced. This will ensure that people can stay in their houses.

Cuirim fáilte roimh an reachtaíocht seo. We support this motion and welcome any moves to discuss solutions for families struggling with distressed mortgages and desperately fighting to keep a roof over their heads. One crucial support for distressed mortgage holders is the Money Advice and Budgeting Service, MABS. The need for such a service is not quantifiable, and many of those who have benefitted from that service can only sing its praises. We need more resources for such a service in order to provide free advice for struggling borrowers. Any such service should be funded by the banks. We also need a binding code of conduct for how banks deal with distressed mortgages. This code must include strong guidelines for banks in dealing with buy-to-let mortgages and the responsibility to tenants, who depend on such properties for their homes. We cannot allow more people to be made homeless due to a repossession or the threat of a repossession. A one-year bankruptcy period would be a positive step and be in harmony with the North of Ireland. The Insolvency Service of Ireland must be given more power to act and courts should be mandated to consider its proposals.

I will mention the continuing problems for people with shared ownership mortgages. There are 16,500 shared ownership arrangements entered into in the State. With shared ownership mortgages, half of the mortgage is paid on a monthly basis, and the other half is rented from the local authority. For the tenant or mortgage holder to buy out the local authority, the value is rising, according to today's prices, and the council rent also keeps rising. People who took up shared ownership mortgages, particularly in the Dublin region, entered into the scheme with the expectation that they would eventually own 100% of the property, as soon as finances permitted and within a short period. The downturn changed all that and many people in shared ownership mortgages ended up with considerably less income than they had when they started the scheme. This is not unusual for people with normal mortgages either but shared ownership was a scheme to benefit people who could not get credit from commercial banks and needed support to get a house.

Many shared ownership mortgages have entered arrears and many families are afraid they will lose their homes. Thankfully, some have managed to avail of the all too narrow mortgage to rent scheme.

Last year, it was announced that €20 million would be made available to bring distressed shared ownership mortgages into the mortgage to rent scheme. The scheme was slow to take off as it was very narrow and included specifications for the houses covered and a protracted process of engagement. This meant many people who would have liked to avail of the scheme could not do so or failed to do so. As of last month, just 88 mortgage to rent arrangements had been completed. These mortgages have all been taken over by approved housing bodies. Speaking to officials in Dublin City Council, only a handful of mortgages have been taken over by the council and the proportion of these that are in distress is not large.

One year on from the announcement that a €20 million fund would be provided thousands of shared ownership scheme mortgages are still in trouble. Not enough of the people affected have been able or have been encouraged to take up this process. This remains a serious issue and one which must be tackled. There is no single solution to the problem. Local authorities should be funded to take full control of the homes in question, buying out the half owned by the resident and renting it back to them, as is done under the mortgage to rent scheme. The mortgage to rent scheme must be also prioritised and residents who are in distress must be made aware of the scheme and guided through it. We also must also consider freezing or reducing rents for shared ownership mortgages to give some relief to people who have lost their job or have a reduced income and, while able to make mortgage payments, are struggling with increasing rents.

One of the main obstacles facing people who are losing their homes is securing access to social housing. Many are being prevented by local authorities from joining the waiting list for housing. More mortgage write-downs should be utilised and the option of splitting mortgages should also be applied. No one should face eviction. It is an indictment of society that eviction is considered in any case.

No Deputy, political party or grouping has a monopoly on concern about mortgage arrears and repossessions. Some of the comments made by previous speakers were nauseating. Some of the Opposition speakers belong to a party which left the country with a rotting carcass of an economy, one which had been destroyed by their actions, while others belong to a political party which believed until recently that the solution to our problems lay in following the path of the Greek Syriza party. I have not heard Sinn Féin Deputies argue recently that Syriza is doing a good job. It has dumped Syriza in the same way as it dumped many of its whistleblowers North of the Border.

The Deputy should go back to the crèche.

Some of the members of the Technical Group have a colourful past. I refer, in particular, to some of the individuals they proposed for the position of Governor of the Central Bank who regulates the financial services industry.

I note the absence of Opposition Deputies, especially from the Fianna Fáil benches. It is not the first time Fianna Fáil has walked out on the people and left the stage vacant. On the previous occasion, it left a rotting carcass of an economy in its wake.

When it comes to concern about this issue political stunts, such as turning up at a courthouse and shedding crocodile tears for people one is not concerned about and who are in mortgage distress because of their inaction in government and the manner in which they ran the country, have a hollow ring to them.

This Government has been in power for four years.

Mortgages can be repaid for up to 35 years. They are not the types of arrangements that allow people to walk into a bank with a pistol and decide they will no longer pay their mortgage.

The people who visit my office with genuine concerns about banking do not care how the issue is resolved. They want it to be sorted out soon which is no more than they deserve. The banks are the final residual issue arising from the carnage caused by the Fianna Fáil Party and their lackeys in the Green Party.

Mortgage to rent schemes are an excellent idea. They allow distressed mortgages to be transferred to a holding company such as the National Asset Management Agency or a local authority. The borrower is then able to continue to live in his or her home in a type of rental arrangement. While the concept underpinning the scheme is good, only a paltry number of people have availed of it. The structure of the scheme must be overhauled. The Government will introduce a suite of measures in the next couple of weeks and I hope this issue will be one of the areas it addresses.

Local authorities rather than the voluntary housing sector are the statutory housing authority. Most Deputies were local authority members at some point and will be aware of the work done by local authorities in the housing area. Local authorities have a role in the mortgage to rent scheme. Caps on values, occupancy rates in respect of bedrooms and the location of eligible homes need to be overhauled. More important, the veto built into the legislation and provided to unelected individuals in voluntary housing organisations who do not have a mandate and are not answerable to anyone must be removed. The ultimate responsibility for the scheme must be transferred to the men and women who are elected to local authorities. The Government has allocated substantial amounts of money to local authorities to address the problem of social housing. Mortgages for which no resolution will be found with the banks are also a social housing problem. It is important to note, however, that while some mortgages are beyond resolution, the majority of people are paying their mortgages and getting on with their lives.

I implore the Minister to restructure the mortgage to rent scheme and transfer responsibility for it to local authorities which are the competent housing agency at local level. The other agencies involved in this area should be removed from the equation because they do not add any great value.

I am pleased to have an opportunity to say a few words on this Private Members' motion. It is a bit rich of Fianna Fáil to lecture others on what should be done in respect of any matter which is, in effect, a legacy of its period in government. I refer specifically to the collapse of the construction industry and subsequent lack of equity in properties on which mortgages were taken out at the height of the bubble. In 2004-05, before the bubble occurred, there were virtually no mortgages in arrears of more than 90 days. At the end of 2014, almost 80,000 mortgages were in arrears for more than 90 days.

The number of mortgages in arrears declined by 26,000 last year, which indicates significant progress has been made. There is no single solution to the mortgage crisis. The Government has implemented a range of measures to address the problem. They include the establishment of the mortgage advisory service, reform of the insolvency and bankruptcy regime and the strengthening of the code of conduct on mortgage arrears. The code of conduct is mandatory and its implementation is monitored by the Central Bank through on-site inspection of mortgage lenders, which is welcome. I also welcome the decision of the Central Bank to set mortgage arrears resolution targets which the banks must meet on a quarterly basis. The target for the fourth quarter of 2014 required the banks to prepare sustainable solutions to 85% of customers whose mortgages were more than 90 days in arrears and conclude agreement with 45% of such customers by the end of the year. The Central Bank recently reported that these targets were met. Clearly, therefore, progress has been made in this regard.

I am concerned that the lending institutions are more readily moving towards the route of repossession. This move is largely attributable to the upturn in the housing market. House prices are much more attractive than they have been, which means banks find repossession a much more attractive option. This is a highly dangerous development which appears to be gaining momentum. As the Government has consistently stated, repossession should be a last resort and avoided where possible. Notwithstanding this, a large number of mortgages are in distress. Some 30,000 mortgages have been in arrears for more than two years and 80,000 have been in arrears for more than three months. Action must be taken to deal with these mortgages

We have to look again at the issue of the bank veto. It no longer serves any useful purpose to allow the banks to have the final say in any debt deal. The Minister should look at Deputy Penrose’s legislative proposals on reducing the bankruptcy period from three years to one year. This will bring it into line with what is operational in the United Kingdom and in Northern Ireland, the other part of the island. This should be the norm for the duration of the crisis. These two measures would help enormously in dealing with distressed mortgages over two years in arrears.

A third measure is necessary for dealing with the high interest rate burden on variable rate mortgages that stand at over 4% when the bank borrowing rate is 1%. The State should be looking at a reduction in the variable interest rate mortgages of AIB, a 99% State-owned bank, of a minimum of 0.5% rather than the rumoured 0.25%. I welcome the statement by the Minister for Finance today that he will initiate discussions with the six main lenders in banking with a view to seeking reductions in interest rates in the near future.

While resolving the legacy mortgage issue we inherited, we most look to the future generation of potential mortgage holders. They have been hit hard by the Central Bank requirement of a 20% deposit for a house purchase. We have to provide some mechanism to allow first-time buyers to acquire deposits and, therefore, acquire a home. The first-time buyer’s grant was the tried and tested method in operation for many decades until 2002. It made no contribution whatsoever to the property bubble in later years. This should be reinstated with a central government grant for first-time buyers to enable them to come out of the rental market, which is becoming a property bubble in its own right, to purchase their own homes

I welcome the opportunity to speak in this debate tonight. The matter of mortgage arrears is essentially the fall-out from bad governance and we are coming to the end of what would be a standard curve in that respect. People were loaned money at low rates. The principal was even a stretch at a time when the country was in full employment. There were long loan terms with 30 plus years but not everyone will have health and wealth for such a long time. I have encountered some people whose loans were in distress quite a while ago. They got mortgages when they were on State benefits. The banks in those cases must bear some responsibility because there was no chance these mortgages could be repaid. The anxiety that people in these situations feel is terrible. There is runaway debt with interest payments and many banks did not have the skills to deal with this early on.

I welcome the guidelines on deposits from the Central Bank which have brought a little bit of sense to the area. I appreciate in Dublin where house prices are high that this is a bit of a challenge. There might be other ways of looking at this to see if there are innovative ways of dealing with this. At the finance committee, members learned how a 5% change on the equity to borrowing ratio can lead to a 10% change in the property value which is quite high.

The borrowing culture was all wrong and very few of us at the time escaped. The 250,000 to 300,000 people in the private sector who lost their jobs were in a terrible position because they did not qualify for social welfare payments. This discussion needs to start and I hope that Members will fill up the survey for the campaign to support small businesses. We need to remember that we cannot allow the mistakes of the past to be repeated.

It is up to all Members to solve this and it is up to the banks to engage constructively, as well as individually and sympathetically. I wrote a policy document about a parked percentage mortgage plan which essentially was subsequently replicated to some degree in the Keane report. We must establish what people can pay in interest and principal with the parked balance left there. One would expect and demand that interest would not be charged on this, especially when we are in an era of 30-year loans having an interest rate of 1%. We need to give more options to the people in question. Down the road, these properties can be sold or transferred with only a small mortgage on the property relative to the value it has. It would ensure people do not worry that they will lose their homes.

We cannot leave these situations to the courts. I have been in the courts to see what has gone on. One has to have some degree of sympathy for the judges lumbered with an issue which should have been dealt with in this House. I know the level of skills in the banks has improved. From running a business back then and having non-core debt, I know it was just a nightmare. However, better communications still need to occur. People are sometimes not aware of their rights. We have had the banks at the finance committee explaining what they have done over the last while but they need to explain more clearly as to how the engagement process works. Restructuring needs to be a two-way process where people are dealt with and they do not have to bear all the costs of it.

I welcome this debate. Increasing employment to the 2 million mark will certainly help in this regard and get people out of distressed mortgages.

We have many relevant debates in this House but this is one of the least academic, even though much of it involves macroeconomics and other high matters. It concerns 110,000 households in mortgage arrears. The Government has talked about it for a long time and a suite of measures has been introduced to support people to find resolutions with pressure brought to bear on banks and supports for individuals. There is still, however, a serious problem for many of our citizens and families.

The banks are perfectly entitled to set interest rates and negotiate settlements on mortgages which were signed up to with no impediments. The banks are perfectly entitled under the normal legal way to repossess houses. However, it is not as simple as that. That is why this debate is taking place. We all know that 85% of people are making repayments, some struggling but they still do it. We still cannot ignore the 110,000 mortgages in arrears. If any substantial numbers of these people are put out of their houses, it will fall back on the State.

We are looking at a time when money has never been cheaper to borrow in Europe for both the Government and the banks. I do not think the banks can go back to business as usual, profits or anything else unless all sectors of our society and economy are fixed. We see people in mortgage arrears and businesses who cannot get credit. Yet, we see the banks levying excessive rates on variable mortgages, on overdrafts, on term loans and even on credit cards, the latter with an APR, annual percentage rate, of 22.5%. That may have been acceptable in a time gone by but how can the banks hope to survive if we cannot rebuild our economy? Our economy requires us to support citizens and businesses which are in distress. The banks have their role to play in this. We cannot proceed with the conversation of the past as to how banks could be independent from the State.

It is true that not all banks were bailed out, but the banking system was saved on the backs of this country's taxpayers. Not only do taxpayers continue to pay, but so also do vulnerable citizens whom we want to support. They have seen services cut back, so without a doubt it has had an impact on everybody.

Perhaps we need to take a different approach to the banks and I perceive that a turn has definitely taken place on interest rates. We want to help people in their homes and businesses, but if banks charge exorbitant interest rates it is taking it back with the other hand. The Government and politicians generally have to step in to bridge the gap. It is not acceptable and this is the reality check I am talking about.

I challenge the idea that a stay cannot be put on banks repossessing. If someone has shown a track record, but has fallen on hard times, they should be given a space before banks are allowed to repossess. I would like to see some independent adjudication of those circumstances. For example, if a person has paid their mortgage for five years, but then falls on hard times due to losing a job, it is unacceptable for a bank to take that person's house. Banks should be made to wait.

We have introduced emergency measures to deal with mortgage arrears and personal insolvency, so the banks should also experience some emergency measures to give people a break. An ombudsman could adjudicate on such matters. In that way, banks could not repossess property if the owners came up with realistic prospects for repaying mortgages.

Let us take another reality check. A few weeks ago, a woman came into me who was given a loan but should not have been. The loan term was going to conclude when she was 71 years old, although her pension would never be able to meet the repayments. No thought was given to that. She has now gone into mortgage arrears and all her savings are gone. She is a pensioner, yet she was given a loan by a bank that doctored papers. I have seen them myself. Little can be made of it, but banks are collectively responsible for this. The banks must be brought to account and be part of the solution.

I welcome the opportunity to speak briefly in this debate. I commend Deputy Donnelly and his colleagues for giving this matter the attention it deserves. They are keeping the pressure on this side of the House to ensure that action is taken to address the issue. I am confident that it will be addressed. The Minister, Deputy Noonan, the Minister of State, Deputy Harris, and the Government as a whole are working on a suite of measures to be introduced in the coming weeks, which will deal with this issue once and for all.

It is the last defining issue that the Government must deal with during the remainder of its term. It is part of a damning legacy that has been left to us by the Celtic tiger. It has placed a millstone around the necks of so many families, which is preventing them from benefitting from the rising tide of economic recovery. Unless our response is commensurate with the scale and gravity of the crisis, those people will be left behind as the recovery continues.

Heretofore, Government policies have focused on providing structures and supports that allow mortgage holders to find solutions and avail of them. There have been a number of initiatives in this regard.

The proposers are to be commended for their positively worded motion. There is always a temptation to have a go at the Government if they feel we are not doing the job to a certain acceptable standard. In fairness, however, this motion does offer some solutions and its tone is quite positive. As the motion states, a number of initiatives have already been introduced by the Government. We have introduced comprehensive personal insolvency legislation. In addition, information lines are available to those who find themselves in mortgage distress. There are a host of other measures, including a code of conduct and a set of standards for banks dealing with those in mortgage arrears.

I agree with what Deputy Michael McGrath of Fianna Fáil had to say earlier about whether or not some of the solutions that are being offered are sustainable. Time will tell whether kicking the can down the road by capitalising arrears on mortgages is a sustainable solution for borrowers. That is the solution that has been offered in many of the agreements reached with borrowers.

There is a difference in how various banks deal with borrowers. Last week, AIB representatives appeared before the Joint Committee on Finance, Public Expenditure and Reform and they are offering practical solutions. They have identified that many of the borrowers, whose mortgages are in arrears, are in difficult circumstances. The best option for them is to crystallise the loss, write down the mortgage and, if necessary, seek voluntary surrender. AIB did make it clear, however, that that is the last resort. If some level of repayment capacity can be shown, that bank at least is prepared to offer significant write-downs to lenders. We need to have some level of consistency in the way different banks deal with borrowers.

Repossessions are taxing the minds of many people at the moment. Last week, AIB indicated that it uses the threat of repossession as a tool to force borrowers who are not engaging with it to do so. Unfortunately, many borrowers just bury their heads in the sand and do not engage with the lender. That should not be the case. I strongly advise people to pick up the phone, as difficult as that may be, and try to deal with the bank because ultimately that is the only way they will get some sort of a resolution.

We must be frank about repossessions, however. There cannot be a properly functioning mortgage market without banks having the right to enforce and realise their security, if necessary. If that threat did not remain with the lender, no one would meet their mortgage payments. The banks have indicated that they are using this threat to force borrowers to engage. In fact, however, the vast majority of such cases in court are adjourned.

I welcome the motion and I look forward to the proposals that the Minister, Deputy Noonan, and the Minister of State, Deputy Harris, will put forward in the coming weeks to deal with this crisis.

This important and vital issue should be discussed more often here. There is not a single Deputy in the House who does not understand how serious the issue of mortgage arrears has been for families in their constituency. As public representatives, we have a responsibility towards families in arrears. Whenever anyone comes into my office or constituency clinics to talk about mortgage arrears, the first thing I always do is strongly advise them to request the bank files about their mortgage and a copy of all information the bank holds on them. I then talk them through the wide range of services available to borrowers in distress. We have some excellent debt advice services, which do important work in our local communities. The financial institutions have also put large, dedicated teams in place to engage with borrowers. The establishment of the Insolvency Service of Ireland was an important turning point in addressing cases of over-indebtedness.

In my native county of Longford, almost one in five mortgages are in arrears, making our small county one of the most severely affected by the property crash. Only a few months ago, the Central Bank, for the first time ever, broke down the level of default on home loans on a county-by-county basis. This showed that Longford has the highest rate of 19% with Westmeath at 16%. Other counties in the Shannonside region, like Leitrim and Roscommon, saw one in seven mortgage holders in arrears for three months or more.

Despite these high rates of mortgage arrears, there is clear evidence that there is better engagement and communication between banks and distressed borrowers.

This increased communication and a willingness to work together has resulted in the number of private dwelling home mortgage accounts in arrears declining by over 25,000 in 2014, while figures from the Department of Finance show that almost 115,000 restructured agreements have been reached by borrowers and lenders.

Since taking office we have introduced a suite of legislative measures to assist distressed borrowers and keep them in their homes. We have seen the establishment of the Insolvency Service of Ireland and the reform of the bankruptcy laws. The Land and Conveyancing Law Reform Act 2013 included provisions to protect the principal private residences of borrowers in mortgage arrears. Meanwhile, the Personal Insolvency Act 2012 instigated a new debt resolution mechanism including the writing off of debt. These were all important measures that provided room to breathe for families who found themselves in mortgage arrears. When we examine these measures it becomes clear that this Government does not see repossessions as a policy solution, and every action that has been taken since taking office has been designed to ensure that the maximum number of people and families can continue to live in their homes.

It is also clear that tackling mortgage arrears has been a dominant policy concern since 2011. It is an issue on which we have been working tirelessly and the Minister must be congratulated for his work to date on that matter. However, as we have seen with the high arrears rates in Longford and the wider midlands region, many families are not experiencing the full benefits of the economic recovery because of their crippling mortgage payments. It is vital that any future legislation or measures to tackle mortgage arrears have a designated plan to reduce the high levels being experienced by midlands counties. We must also realise that over 85% of mortgage holders are meeting their obligations with respect to making their monthly repayments, and in many cases this occurs at significant personal sacrifice. On that issue we are aware of many individual stories.

There is one serious issue that is often overlooked, however. Under the Insolvency Act 2012, any insolvency planner can make a proposal to a bank about how to restructure an individual's debt. This could be a very reasonable proposal yet the bank has the option to veto it without any avenue for recourse. I strongly urge the Minister to consider the creation of an oversight committee where insolvency planners and their clients can appeal a bank's decision on how debt is to be restructured. For example, a High Court judge could fill this role.

The Government is very aware of the difficulties facing families. We have made some important strides in tackling the issue as a result of the set of policy approaches we have taken. The increased communication between banks and those in arrears has also played a positive role, but we should remember also the role played by the huge number of people in mortgage arrears.

I welcome the opportunity to speak on the Private Members' motion on mortgage arrears. I, along with the Government, am only too aware of the great difficulties many families are facing in respect of mortgage arrears. My constituency office in Dundalk deals with constituents in serious financial distress as a result of mortgage arrears almost on a weekly basis. The situation in my constituency is not just confined to Dundalk but other areas including Ardee, Dunleer and Drogheda. From speaking to fellow Deputies it is clear that this is repeated throughout the country.

This situation, which we inherited from the previous Government led by Fianna Fáil, is a painful reminder of the disastrous and reckless policies pursued by the Members opposite in their pursuit of holding on to power at all costs. I find it incredible that the party that caused the biggest economic crash in our history now believes it can use the pain and suffering of the people who ended up as victims to further its own political ambitions. That is morally wrong, and this issue cannot be used as a political football, which all Members opposite seem to believe it can.

We, as the Government, understand the real pain people have gone through and the pressure they are under due to mortgage arrears. The only long-term solution to this arrears crisis is to ensure that the recovery currently taking place is felt by everyone, in every part of the country. There is no quick fix to this, as the Members opposite seem to believe.

Only last week a constituent made contact with me to inform me that he had secured full-time employment. This was the first time in over four years that he returned to full-time employment. To give the House some background on this case, this person first contacted me just over two years ago. He had fallen into arrears on his mortgage and was worried that he might lose his home. He had worked in the construction industry and was earning very good wages during the so-called Celtic tiger period. He purchased his first house during this period and took out his first mortgage. He, like so many others, did not expect the economy to crash. He eventually lost his job and was reliant on social welfare. As a result, he fell into arrears on his mortgage. I worked with him over a period of time and we negotiated a payment plan with his mortgage provider to ensure that he could remain in his home. The relief that he and his family felt when he got a new job recently is very hard to explain. He explained to me that it was like a weight being lifted off his shoulders and that he and his family could start to live again. That situation is being repeated throughout the country and proves again that the only way out of this crisis is through building a sustainable economy. I see that at first hand in my constituency where over 1,000 new jobs have been announced in Dundalk alone by the likes of PayPal ,eBay, Prometric and Sales Sense.

As a Government, our main priority in this matter is to ensure that families stay in their homes. There is a solution for everyone but we also know that those in long-term arrears are not making the same progress as others and that there are too many cases before the courts. I am pleased to note that we intend to examine the arrangements already in place to ensure there is a viable and sustainable solution for all those who want one.

I repeat that the only long-term solution to this crisis is to build a successful economy that is both sustainable and a benefit to all people. Only then will we see a reduction in mortgage arrears.

The next speaking slot is shared by Deputies Joan Collins, Richard Boyd Barrett, Seamus Healy, Thomas Pringle and Maureen O'Sullivan.

I am pleased to speak to this Private Members' motion. This has been an ongoing issue since the crisis hit and many of us on this side of the House believe the Government has not grasped the nettle in terms of the position in which people find themselves.

Data released from the Courts Service indicate that as of 1 January, 7,101 civil bills for repossession have been lodged by the banks across the State's 26 Circuit Courts. The largest volume, 1,420, is lodged in Dublin Circuit Court followed by 564 in Meath Circuit Court, 543 in Cork Circuit Court and 412 in Galway Circuit Court. The next highest number, 405, are active in County Kildare underlining increasing distress among mortgage holders in the commuter counties around Dublin. In Wicklow there are 255 active bills for possession lodged by banks. That is the seriousness of the situation people are facing. In all, 8,164 civil bills for repossession were lodged with the courts last year. The highest number lodged in any court in any one month was 382 in Dublin Circuit Court in March last year. The highest number lodged nationally was in June last year when banks lodged bills in respect of 1,632 homes. These figures are from the Circuit Court report.

The serious aspect of this is that the figures show that in every month last year applications to repossess primary family homes far exceeded those for buy-to-let properties. For example, in December, 694 bills to repossess family homes were lodged across the State compared to 21 for buy-to-let properties and 167 for other unknown dwellings. In November, 350 applications were in respect of primary family homes while 24 were for buy-to let-properties. We know the reason for that. With a buy-to-let property the banks can hold on and make money but in regard to family homes they can force the people out, sell the homes and make money on them with the increase in house prices. That is outrageous, and the banks should not be able to get away with it.

It was very disappointing to hear the Minister for Finance, Deputy Noonan, say earlier that the Government is still considering measures to deal with the mortgage arrears crisis. It should have been dealt with a long time ago. I brought a Private Members' Bill before the House recently on a code of conduct for the banks. It was to make it mandatory that the banks would implement a code of conduct but it was not accepted by the Government. We have been waiting some time for the announcement of measures promised in early spring.

Meanwhile, hundreds of repossession applications are being heard and approved in the courts on a weekly basis. The Minister for Finance has stated that the banks are bringing home owners to court for repossession only to make them engage. That is an insulting remark to make to people who face the repossession of their homes. If the Minister believes that, he is living in a different universe to the rest of us.

I will give the House one example of how people are being treated by lenders and how easy it is for the lenders to gain possession orders through the courts. I was dealing with a family in Drimnagh of two adults and their children ageing from very young to a teenager. They lost their income having been self-employed with a small business that collapsed in the economic crisis. The family engaged at all times with their lender through the Central Bank's mortgage arrears process. They had third party representation through the Irish Mortgage Holders Organisation. A proposal to resolve their problems was put forward under the mortgage-to-rent scheme. The family met all of the conditions and a housing association agreed to pay the market value for the property. The lender, Stepstone, refused point blank to accept the proposal, went to court and obtained a possession order. The family is preparing to move to rented accommodation. While they are entitled to social housing, social housing accommodation simply does not exist. That is the reality for a family that went through the whole process, engaged and was turned down. The Irish Mortgage Holders Organisation tried to take this matter to court on foot of the code of conduct and mortgage-to-rent scheme, asking why these were not being enforced on the bank. However, its arguments were not accepted by the court, which said the code and the scheme were not mandatory or legally enforceable.

This is the reality of lenders who will not touch the mortgage-to-rent scheme and of a general reluctance all around in relation to it. This will change only when it becomes an obligation on the banks to accept the mortgage-to-rent scheme and to engage. We need redress through the courts for homeowners struggling to maintain family homes in respect of lenders who refuse to engage. This morning, I was astounded and disgusted to hear that Ulster Bank was offering 2,000 homeowners in arrears who qualify for social housing the cancellation of their debt provided they made themselves and their families homeless. It is an outrageous thing to put to people who face distress and concern for their families. These are the people who should be able to avail of the mortgage-to-rent scheme. The scheme must change and it should be made fit for purpose. Key among the necessary changes is a raising of the valuation cap to take account of the rise in house prices, particularly in the Dublin area and other cities.

This is the second Private Members' Bill on this issue. I moved one in 2013 and there have been a number of Private Members' motions from the Opposition, but not a single idea has been accepted by the Government. I agree fully with the reduction of bankruptcy to one year pending the resolution of the mortgage crisis. This step must be taken as soon as possible. It is time to drop the pretence that lenders are dealing fairly with homeowners who engage and to take serious action to deal with this crisis. I support the Bill absolutely.

I welcome the opportunity to speak on this Private Members' business and welcome and support the many practical measures proposed to address the mortgage arrears crisis. A reading of any of the statistics relating to mortgage arrears in Ireland today is truly frightening. To give an overview of the situation, seven of every ten residential mortgage holders who are behind on their repayments are in long-term arrears. Of those, 37,778 are in arrears of two years or more. According to the Central Bank's own data, 31,000 home owners have been threatened with repossession by the six main banks. The latest figures from the Department of Finance show that 70%, or seven out of ten, home owners who are three months or more in arrears have yet to reach a deal with their banks to get back on track. These statistics clearly illustrate the severity and the reach of this problem, which is not going away.

There is no doubt that thousands of families fear losing their family homes. The fear is palpable and traumatic and has given rise to very serious illnesses including mental health issues for individual family members. People fear even the sight of the postman in case he has the dreaded letter from the bank demanding the sale or repossession of the family home. Indeed, I have a copy of such a letter with me, which it might be worth reading from briefly. It is a letter of the type which is sent out under the code of conduct on mortgage arrears and the options it gives are voluntary sale or a thing called "voluntary surrender"; in other words "repossession or eviction". It goes on to state

In all of the options above, please note that in the event of a shortfall you remain liable for the outstanding debt including accrued interest, charges, legal, selling and other related costs. We will always seek the gross sale proceeds and a certified copy of the unconditional contract for sale.

It goes on further to state:

While we note that forbearance is not appropriate, if the repayments due are not met and arrears accumulate on the mortgage, regrettably this account may be referred to our solicitors for collection of this debt.

In other words, "you will be evicted". The sad fact is that up to 30,000 families face eviction due to the failure of the Government to protect them. These are families who do not qualify for insolvency procedures as they have no or insufficient disposable income. They are people who have fully engaged with their lenders and are not strategic defaulters. Their only assets are their family homes. They hold modest mortgages, many of which are under €100,000, and almost all of which are under €200,000. In the main, they are low-income families headed by unemployed persons. They are in this position through no fault of their own. They took out mortgages when employed to put roofs over the heads of their families and they now find themselves unemployed because of the reckless activity of the Irish elite, including the Central Bank, the banks, the Government and their cheerleaders in the media.

There is no doubt that the measures that have been put in place to deal with the crisis are simply not working. Some of those have been mentioned already, including the insolvency system which needs to be overhauled. The insolvency guidelines must be changed and the bank veto must be withdrawn and an independent arbitration put in place. The mortgage-to-rent scheme is excellent in principle but it is simply not working as the banks will not allow it to. This is a scheme which allows people to remain in their family homes, becoming tenants of voluntary housing agencies with the option to repurchase the home if times get better and they become employed. The whole question of the write-down of mortgages to current levels of valuation must also be addressed. The motion is a practical one. It may not go far enough to solve the problem, but it certainly puts in place procedures and practical steps which go in the right direction. I support the motion.

I welcome the opportunity to contribute to the debate on mortgage arrears. I commend Deputy Stephen Donnelly on the work he has done in presenting the motion to the House this evening.

It is ironic that the spring economic statement was debated today with talk of €1.5 billion in wriggle room available for the upcoming budget while on this side of the House we are talking about families who are still struggling to keep their homes. These people have no wriggle room because the banks will not allow it. In my constituency in Donegal, the situation for home owners is grim. There are 271 repossession cases before the courts in Donegal and 15% of homeowners are in serious mortgage arrears according to the Central Bank.

Although the motion welcomes the recent reductions in total mortgage arrears levels, we must be wary of the Central Bank's warning that the rate of house repossession in Ireland is likely to ramp up significantly in the coming months with new figures showing nearly half of the proposed solutions for distressed borrowers involve the loss of properties. I therefore support this motion because it brings in solutions now and not later. Like many other motions that have come before this one, it offers a borrower-focused solution to the mortgage crisis. That has been the primary problem with any solution presented by the Government. Its policies are not borrower-centred; they are bank-centred. This forces the stakeholders involved and the borrower to ultimately heed the demands and wishes of the banks.

The range of policies seen over the lifetime of this Government attempting to address the mortgage crisis include the Insolvency Service of Ireland, the code of conduct on mortgage arrears, the mortgage-to-rent scheme, a reduction in the bankruptcy term and the Central Bank's mortgage arrears targets. Some were positive attempts to tackle the overwhelming mortgage crisis executed in typically bad form, while others were clearly bank-centred with no room for the borrower to negotiate. While believing the Government is far too late in addressing the mortgage crisis and that it ignored warnings given within this House of an impending crisis, I also believe that by shifting policy direction towards the borrower - the home owner and the family - we can work towards unravelling the damage already done.

This motion calls on the Government to act in a multi-pronged approach through funding mechanisms, introducing legislation, amending previous legislation and introducing new schemes and reviews of current practices. We must turn around completely in the opposite direction and undo the damage caused by previous policies and implement better ones, but this time with the home owner at the centre. I draw the House's attention to the motion's policy objectives which reflect that turnaround. These include the minimising of socioeconomic harm, avoiding repossessions when it is the family home, ensuring the dignity of all parties and equity in the resolution of unsustainable debts, ensuring sustainability is at the heart of procedures, avoiding rehousing as a solution and ensuring adequate advice and representation is provided for borrowers. The last point is particularly important. This has been a consistent complaint by home owners, especially under circumstances where they cannot afford effective advice or representation throughout the process.

If we look closely at the policies currently in place, we can see how bank-centred they are. The Insolvency Service of Ireland was established in 2013. When analysed, the figures for deals done in 2014 showed that nearly half, some 448, were not deals but bankruptcies and a further 230 were arrangements relating to debts below €20,000. There were 199 personal insolvency arrangements including property and 98 debt settlement arrangements on unsecured debt.

How do we make this system more borrower-friendly? We need to get rid of the banks' veto power to force them to engage with their customers. The mortgage-to-rent scheme has been bank-centred and has failed to provide a last resort to prevent repossession while saving the Exchequer from funding families who have lost their home. As the banks control the process and other stakeholders managing it have to take advice from the banks, the scheme was doomed to fail and so it has. Just two cases have been completed in the north west since the scheme's launch in 2012. Neither of them was in Donegal. Nationwide, the figure is a shocking 88.

The code of conduct on mortgage arrears has also proved contentious. Currently no bank has been sanctioned over breaches of the code, which is incredible as the code is statutory and many housing authorities insist breaches have been made. If those in arrears are declared by their lender to be unco-operative under the code, the borrowers can lose all their protections, up to the point of having their homes repossessed. This is an incredibly imbalanced relationship between lender and borrower. The bank has far too strong a hold. How can a borrower compete with this amount of authority? How can it trust that the law would be on its side if not one lender has been sanctioned for breaches that are obviously occurring?

The picture is very clear. Significant profiteering is taking place on the backs of very vulnerable people who are struggling to meet their mortgage payments and struggling through this recession. Much has been made over recent months of the banks returning to profitability, but the debate has exposed how that has happened, namely, by screwing people on variable rate mortgages. We see the facade that is the banks having returned to profitability, which has happened on the backs of vulnerable people who are struggling to keep roofs over their heads. This Government has allowed that to happen. It has lain down before the banks at every opportunity and allowed them to continue to ride roughshod over the citizens of this society. The Government needs to act now.

More than 300,000 families are on variable rate mortgages with interest rates of up to 4.5% while the banks are borrowing money at between 1.1% and 1.5%. If all those 300,000 people were paying an extra €6,000 per year in interest, compared with what they would be paying if they had reasonable rates on their mortgages, it would contribute more than €1.8 billion in profits to the banks. That is what we have, namely, a picture where the banks are fuelling the recovery on the backs of distressed mortgage holders and people who are struggling to meet their repayments. The Government must act and act now. It must stop lying down before the banks and bending over for them every time they demand it.

I acknowledge the work that Deputy Stephen Donnelly did in respect of this motion. It is comprehensive and practical. The key word in the title is the word "resolving". The motion sets out some practical and sensible solutions and a common sense approach to this aspect of the housing crisis. I also acknowledge his consistent work on this matter. He has been a strong voice for those who are dealing with mortgage arrears.

The motion sets out the facts, the extent of mortgage arrears and the rising number of repossession cases. Last week during Leaders' Questions, I brought up a related issue which is affecting people in my constituency and others. Individuals, couples and families in the private rented sector are facing increasing rents which they cannot pay and which in turn leads to increasing numbers of people finding themselves homeless. The Taoiseach's reply was to outline the housing strategy. My reply to him was that if that strategy were working, we would not see increasing numbers of people being homeless; we would see a decrease. Likewise on the subject of mortgage arrears and repossessions. If all that is mentioned in the Government amendment tonight were working, we would not have the present extent of mortgage arrears and a rising number of repossession cases.

I had a look at the Government amendment and its language. Some of the words include "challenge", "the Government is aware", "decisive action", "effective management", "continuous review" and "concerted action by the banks". These are very fine words, but the reality is that people are continuing to lose their homes.

Deputy Donnelly wrote recently about being in attendance at a court dealing with repossessions. I was struck by the description of the people in court. Some of them were present there without legal or financial advice. At the end of his piece, Deputy Donnelly made the point that they looked bewildered and as if they did not understand what had happened. What had happened was they had lost their homes. I therefore very much support the statement that there is a need for adequate and independent financial expertise and legal representation for those in arrears who cannot afford it. No one should be left bewildered by the process.

The Government amendment mentions a commitment to completing a review of the implementation of the Central Bank's mortgage arrears targets and how the Insolvency Service of Ireland is operating and strengthening an independent advice service. However, there does not seem to be any sense of urgency about this situation, which has been allowed to continue for far too long.

Recently I was speaking to some younger people who feel they will never be in a situation where they can buy their own home through a mortgage. They feel that more and more people will be renting in the private sector. This is leading to significant rises in rent, which is putting stress on the private rental sector. These people are in their late 20s and 30s and are in good employment and would like to buy their own home. However, for various reasons, such as the insecurity around the eurozone, they feel that they cannot. They have seen many examples of people in negative equity and their peers' homes being repossessed. They are also facing insecure employment. They are looking at what is happening in Britain. There is a feeling that there is a generation of British young people who will be the first generation to never consider buying a home. One young man put it to me very succinctly when I asked him why he is renting and not buying. He said: "Property ownership feels like it is a marker of stratospheric success or evidence of having been born lucky or having inherited early." What seemed predictable and manageable - buying a home - is daunting and unsettling for a generation of younger people today.

We used to have one of the highest rates of home ownership within the EU. Historians and sociologists will back up the contention that it comes from our history. This is a history of tenants, landlords, evictions and the Land League - the historical one - and so on. It is becoming harder and harder. Perhaps we need to think more European and consider a culture of lifelong renting. However, that would require the Government to embrace rent management because long-term renting will not work if landlords can increase rents at will.

Private renting is negatively affected by a lack of action on mortgage-to-rent and mortgage-to-lease schemes.

I wish to raise two further points. We must acknowledge the pressure placed on individuals and couples by banks and lending institutions to buy properties at exorbitant prices and with exorbitant mortgages. We must differentiate between those who bought houses as their homes and those who bought to build property portfolios. These two points must be considered in the context of writing off mortgage arrears.

The banks owe their solvency to the Government and the people. In turn, the Government's priority must be the people. It must be firm with the banks and ensure that repossessions and arrears are handled humanely rather than via a corporate and profit-driven model only. The way to solve any problem is through working together. Deputy Donnelly has acknowledged the interventions and progress that have been made. As such, I hope that the Government will acknowledge and take on board some of his proposals and suggestions.

I will begin by echoing the sentiments expressed by my colleague, the Minister of State, Deputy McHugh, when he delivered the Government's opening response to this debate. I join with Deputies on all sides in thanking Deputy Donnelly for tabling this Private Members' motion on mortgage arrears. I welcome the opportunity to contribute on what everyone agrees is an important issue, one that I assure the House is rightly receiving significant attention from the Government.

The tabling of this motion was timely. We have heard a range of views from all sides of the House that will be useful to the Government's considerations in the context of its imminent announcement on mortgage arrears. Turning to her request, I assure Deputy Maureen O'Sullivan that every idea raised during this debate will be considered. There is no monopoly on good ideas. We do not believe that the Government has all of the answers. Many ideas raised and suggestions made during this debate are under active consideration. An announcement from the Government is imminent, as the Minister outlined in his spring economic statement this afternoon.

From listening to the debate, it strikes me that the Government and members of the Opposition are looking to achieve similar outcomes in respect of mortgage arrears and retention of the family home. We could have a debate on how best to achieve those outcomes. Addressing personal indebtedness is essential as our economy returns to strength. In that sense, I do not accept Deputy Pringle's suggestion that it is ironic to hold this debate on the day of the spring statement. Getting to full employment, reducing taxation, putting more money in people's pockets and increasing domestic demand in the economy will help a normal banking and mortgage system to function.

Since taking office, the Government has put in place a broad strategy to address the problem of mortgage arrears, which the motion recognises. The strategy has included an extensive suite of interventions, for example, specific Central Bank targets for the banks through the mortgage arrears resolution targets, the code of conduct on mortgage arrears, extensive recasting of the personal insolvency legislation, which must be recognised by all sides, the provision of advice through Department of Social Protection-led initiatives and the mortgage-to-rent scheme, which is designed to assist borrowers in unsustainable mortgage positions to remain in their homes through the involvement of social housing agencies. However, some of the criticism of that scheme made this evening was legitimate in terms of the need to reconsider it.

The Central Bank's most recent publication, published in March 2015, covered data to the end of quarter 4 of 2014 and showed that the number of mortgage accounts for principal dwelling homes - family homes - in arrears continued to fall, marking six consecutive quarterly declines. The Central Bank also showed that there were 758,988 mortgage accounts outstanding in December and, of these, 648,622 or approximately 85% were not in arrears. This is an important statistic and sets a context for holding debates and considering the entire mortgage situation. While the number of accounts in arrears over 90 days remains high, they are down from a peak of 98,736 at the end of September 2013 and stood at 78,699 last December. While much remains to be done, this represents a 20% decrease in arrears in this category.

I will make a point about the benefits of indebted borrowers engaging with their lenders in the context of the Central Bank's data on mortgages that have been restructured. Almost 115,000 family home mortgage accounts have been permanently restructured. Some of these may not have been in arrears. This number is approximately one in seven. Over the course of 2014, there was an increase of more than 30,000 in the number of accounts that were restructured. A significant number of mortgage accounts have been restructured, although more need to be, and a large number of borrowers have consequently been able to remain in their homes. This shows that engagement between borrowers and lenders can make a crucial difference and can pay off. This is not a criticism of borrowers. Often, people are in stressful situations. It is important that the engagement be meaningful. The Government will ensure that this issue is addressed in the new package of measures to be announced imminently.

It is also worth emphasising that, even if the mortgage arrears resolution process has concluded and legal proceedings have commenced, the code of conduct on mortgage arrears requires that a lender must continue to maintain 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 code of conduct is an important consumer protection mechanism and compliance with it is monitored by the Central Bank.

It is worth repeating that 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 an absolute last resort. Every effort should be made to agree an acceptable arrangement as an alternative to repossession. This is the approach that we are taking in the measures that we will shortly introduce.

The Government will have to-----

The Government is determined to ensure that the personal insolvency legislation, representing the largest reforms in personal insolvency, and support structures can work effectively to support a return to solvency for borrowers struggling with unsustainable debts. In this context, the Government is considering all options on improving the effectiveness of the range of solutions available to a person who is trying to resolve unsustainable debts. The Government will make an announcement on the mortgage arrears issue in the coming weeks. It is intended that announcement will focus on initiatives aimed at reducing the number of mortgages in long-term arrears and will seek to facilitate borrowers remaining in their homes wherever possible. The constructive debate from all sides of the House has been useful in that regard.

The next speaking slot is being shared by Deputies Fitzmaurice and Donnelly.

I welcome the opportunity to contribute on this debate. I acknowledge Deputy Donnelly for proposing this motion. He understands finance and has worked in various fields in different countries. The one thing we should take from this debate is that the Government should listen to what Deputy Donnelly is proposing.

Ironically, we listened to the spring statement today. Everyone welcomes good news and we do not want to be pessimistic, but as that debate was happening, I glanced at my telephone and saw that a family of six in Cork was sleeping in a car. This is the Ireland in which we live. We must ask ourselves where we are going as a nation.

In recent months in particular, more people have approached politicians. We acknowledge the work done by Mr. David Hall, the Money Advice & Budgeting Service, MABS, and other groups. From speaking with a large number of people in recent weeks, the arrogance being shown to them by banks is unsustainable. In that time, I have gone with people to try to resolve problems, but the banks hold the cards and are telling people what to do. This cannot continue. We must put the banks into a corner and bear something in mind - when they knocked on the former Government's door in the middle of the night in their hour of need, we as a nation put €65 billion behind them. Now, when people in family homes across the country genuinely need help, the banks are giving them the two fingers.

There is a fear among families. An old saying down the country is that, when poverty comes in the door, love goes out the window. People are living in dire straits. The Government must consider all of the knock-on effects on families, for example, separations or something that none of us wishes to hear about, namely, suicide. It has happened. Banks have much to answer for, given their arrogance. The Government cannot just wave a magic wand and tell them to do this, that and the other.

Pressure must be put on the Central Bank to ensure the banks engage in a constructive way. The priority must be to protect the family home, which is part of the fabric of Irish society and of enormous importance to all families, especially where there are young children.

We talk all the time in here about what must be done to resolve housing issues in different parts of the country. I attended a meeting in Leitrim yesterday where I spoke to the local authority's housing officers, as I have done in the case of various councils. There is always discussion about building houses and so on. The reality, however, is that something might be announced in October, but by the time the greenfield site is ready, planning is secured and so on, it will probably be a year or 14 months before the project is up and running. What can we do when people are under pressure but there are no houses in which to accommodate them? There was a case in my own area where a family was evicted and, within five years, the State, through the provision of rent allowance, had paid back the price of the house, in which somebody else was now living.

The Government has acknowledged the merits in Deputy Donnelly's proposals, but they need to take them on board and drive on towards a resolution of this crisis. This is a problem people on all sides of the House are encountering in their constituencies. It is a problem for every politician to solve and an issue of great urgency for the nation. I urge the Minister of State and his colleagues to work with Deputy Donnelly to get these issues resolved.

I thank all Deputies for their contributions. We have had a very useful and timely debate in a context where the Government is expected to present a package of new policy measures in the coming weeks. I thank my colleagues in the Technical Group who put their names to the motion.

My sense from listening to the debate tonight is that there is a great deal of good intentions on all sides of the House but also an extraordinary lack of urgency on the part of the Government. Its amendment to the motion does not scream "crisis", yet there can be no doubt that we are facing a crisis. It is a crisis that was allowed to develop by the previous Government and allowed to continue by this Administration. The international data show that the country in the eurozone that has come closest to our level of arrears is Spain. The data show, too, that our level of arrears is two and a half times that of Spain. In other words, no other country is facing this level of mortgage arrears, and that is because other countries have acted to address the issue. In Ireland, we simply have not seen enough action by Government.

My colleague, Deputy Thomas Pringle, noted that the Technical Group first tabled a Private Members' motion on this issue in May 2011. Even back then we were calling for many of the measures that are being called for now, not only on this side of the House but also by Deputies opposite. The Minister of State, Deputy Simon Harris, will be familiar with many of the actions we are proposing because he and I were both signatories to the finance committee's report on the mortgage crisis, upon which this motion is based.

I will use the remaining time available to me to address the points made by the Minister of State, Deputy Joe McHugh, in his contribution. His response reflected the nub of the problem, which is that there is a lot of good intentions and a great deal of talk about schemes that are in place and attempts that have been made to address the problem but which are simply not working. The Minister of State noted that the Government has put in place a broad strategy to address the mortgage arrears crisis, which includes the mortgage arrears resolution targets. We know, however, that this process mostly resulted in the issuing of thousands of legal letters. In fact, the spike in repossession claims comes out of those targets.

The Minister of State also referred to the code of conduct on mortgage arrears, CCMA. That was a nice idea but there are two important points to note in regard to it. First, the original code was watered down significantly and, second, it is completely unenforceable. No lender has suffered any sanction for anything to do with the CCMA. The code is, unfortunately, largely irrelevant.

The Minister of State went on to talk about the extensive recasting of the personal insolvency legislation. Every Deputy in this House knows that legislation is not working. Only a handful of cases has been brought through, as explicitly referenced in the report by the finance committee last year. There is talk of the provision of advice through the Department of Social Protection. The most useful aspect of this should have been the €250 to be paid to an accountant to provide the borrower with independent financial advice. The problem with that, however, is that the accountant is legally obliged to provide advice only on the offer made by the bank. Therefore, it is next to useless. The other measure referred to by the Minister of State was the mortgage-to-rent scheme. That initiative is a good idea, but it has never worked and it still is not working. It must be made to work.

The policy objective for mortgage arrears, which is referenced in the Government's response to the motion, is very important. I have before me the report of the expert group on repossessions, which states: "The Government's paramount objective in the context of resolving the mortgage arrears problem is to keep borrowers in their home wherever feasible; repossession of private residences is a last resort where all other options have failed". That sounds good, but it does not reflect what is happening in practice. I attended a sitting of the Circuit Court last week in Bray where a repossession order was granted on a mortgage where the last payment was made just three weeks previously. Ten possession orders were granted, several of them in a context where it clearly was not the case that every conceivable option was exhausted. The Government policy in this regard makes sense, but it is not reflected in what is actually happening.

The Master of the High Court, Mr. Edmund Honohan, made a presentation to a conference recently where he observed that there is a lack of Government policy objectives. In the absence of such objectives, the courts are being asked by legislators, in an unreasonable manner, to use their discretion. They do not know, however, what they are meant to use their discretion for. That is why I have outlined in my motion a range of additional policy measures, such as minimising socio-economic harm, avoiding repossession where possible, ensuring the dignity of all parties, ensuring equity in the resolution of debts, ensuring restructuring arrangements are sustainable for all parties, minimising rehousing needs, avoiding incentive for strategic default, ensuring adequate advice and representation for borrowers, and ensuring adequate insolvency options for borrowers. I hope the Government will consider broadening the explicit policy objectives along these lines.

The Minister of State said that 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. That is only useful if one can go to court with a lawyer who can say to the judge or registrar, "I am sorry, but the lender is not compliant with the CCMA". If people are turning up to court without legal representation, which most seem to do, the CCMA is irrelevant because they do not know they have those rights. Moreover, the CCMA only applies where a borrower is deemed to be co-operating. Under the legislation, the entity that deems a person to be co-operating or not co-operating is the lending bank, and the latter has fairly wide discretion as to what it deems to be non-co-operation. That is a very important point.

The Minister of State went on to talk about the changes to the Land and Conveyancing Law Reform Act, changes which I welcomed. In fact, Mr. Ross Maguire of New Beginning and I wrote a lot of those measures into my Family Home Protection (Miscellaneous Provisions) Bill, which was subsequently incorporated into the Land and Conveyancing Law Reform Act. The Minister of State notes that the latter gives discretion to the courts to adjourn proceedings unless every option has been considered. A personal insolvency practitioner, PIP, can come in and his or her advice will be taken on board. That is useful if the borrower has access to a PIP. In most cases, however, borrowers cannot afford to avail of the services of a PIP and Government policy does not provide for same in those circumstances. That is dealt with in the motion.

We have talked about the mortgage-to-rent process. The Minister of State, Deputy McHugh, stated that up to the end of 2014, 70 cases had been completed. I have pushed a few of them across the line, as I am sure have other Deputies. There are 166 Deputies in the House but only 70 cases have been completed. The process is not working. Worryingly, the Minister of State, Deputy McHugh, stated that the new protocol has been reviewed and that it tries to address the acknowledged delay in the mortgage-to-rent process. The issue is not the acknowledged delays in the process. There are complexities in the process. The issue with the mortgage-to-rent scheme is that the conditions for qualification are so onerous that virtually nobody qualifies for it. Many years ago, I brought this issue to the attention of the then Minister with responsibility for this issue, Deputy Jan O'Sullivan, but nothing meaningful has happened yet. The conditions for qualification must be widened if the mortgage-to-rent scheme is to work.

I want to make a final point on the proposal the Government is talking about bringing forward. The Minister of State, Deputy Harris, said in his response that, "It is intended that the announcement will focus on initiatives aimed at reducing the number of mortgages in long-term arrears and will seek to facilitate borrowers remaining in their homes wherever possible." That is good but it is not enough. The finance committee report, for example, suggests that a comprehensive solution must include consistency for borrowers. We all know that the first question one asks a borrower in arrears when he or she comes in seeking our help is, "Which bank is it?". If it is Bank of Ireland versus Allied Irish Banks, one is in a completely different world. That must change. There must be equity and transparency. The bankruptcy period must be reduced at least temporarily for a few years until this issue is sorted. The payment attachment order period must be reduced.

I look forward to seeing the Government proposals. The motion before the House is a comprehensive, non-political effort. It reflects the wishes of the finance committee. It also reflects what borrowers and experts in the field are saying. Had it been implemented in 2011, the mortgage crisis would now be a thing of the past. I ask the Government to please take a look at this, to implement as much of it as possible and to be more ambitious than it has been with the proposal so far.

Amendment put:
The Dáil divided: Tá, 67; Níl, 32.

  • Bannon, James.
  • Barry, Tom.
  • Breen, Pat.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Byrne, Eric.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Collins, Áine.
  • Conlan, Seán.
  • Conway, Ciara.
  • Coonan, Noel.
  • Costello, Joe.
  • Coveney, Simon.
  • Creed, Michael.
  • Daly, Jim.
  • Deasy, John.
  • Deenihan, Jimmy.
  • Deering, Pat.
  • Doherty, Regina.
  • Dowds, Robert.
  • Doyle, Andrew.
  • Durkan, Bernard J.
  • English, Damien.
  • Farrell, Alan.
  • Feighan, Frank.
  • Fitzpatrick, Peter.
  • Gilmore, Eamon.
  • Griffin, Brendan.
  • Harrington, Noel.
  • Harris, Simon.
  • Hayes, Tom.
  • Keating, Derek.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lynch, Ciarán.
  • Lyons, John.
  • Maloney, Eamonn.
  • McFadden, Gabrielle.
  • McGinley, Dinny.
  • McHugh, Joe.
  • McLoughlin, Tony.
  • McNamara, Michael.
  • Mitchell, Olivia.
  • Mitchell O'Connor, Mary.
  • Mulherin, Michelle.
  • Murphy, Eoghan.
  • Neville, Dan.
  • Nolan, Derek.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Dowd, Fergus.
  • O'Mahony, John.
  • O'Reilly, Joe.
  • O'Sullivan, Jan.
  • Rabbitte, Pat.
  • Ring, Michael.
  • Ryan, Brendan.
  • Shatter, Alan.
  • Sherlock, Sean.
  • Spring, Arthur.
  • Stanton, David.
  • Tuffy, Joanna.
  • Twomey, Liam.
  • Walsh, Brian.


  • Adams, Gerry.
  • Broughan, Thomas P.
  • Calleary, Dara.
  • Collins, Joan.
  • Colreavy, Michael.
  • Crowe, Seán.
  • Donnelly, Stephen S..
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fitzmaurice, Michael.
  • Fleming, Tom.
  • Grealish, Noel.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Keaveney, Colm.
  • Kirk, Seamus.
  • Mac Lochlainn, Pádraig.
  • McGrath, Finian.
  • McGrath, Michael.
  • McLellan, Sandra.
  • Murphy, Catherine.
  • Ó Caoláin, Caoimhghín.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Ross, Shane.
  • Stanley, Brian.
  • Tóibín, Peadar.
  • Troy, Robert.
Tellers: Tá, Deputies Joe Carey and John Lyons; Níl, Deputies Maureen O'Sullivan and Stephen S. Donnelly.
Amendment declared carried.
Motion, as amended, put and declared carried.