The dictionary definition of a "mortgage" is a legal agreement by which a sum of money is lent on the security of buildings, lands, etc. Unfortunately, today the majority would define a mortgage as equating to heartache, headache, stress and anxiety. Do I need to go on? The list of negative adjectives to match negative equity is endless.
While I appreciate that some banks are restructuring mortgages, far too many mortgages holders are still struggling. The nightmares that are mortgage arrears and negative equity do not call for flowery or up-beat language; the facts speak for themselves. Court proceedings, repossessions and the prison of negative equity are, unfortunately, part of our daily dialogue. Families are desperately trying to hold on to the family home by any means they can. I know of people renting out the existing family home while renting cheaper accommodation for themselves in an attempt to raise much needed funds. One family known to me, about to have their home repossessed, simply upped sticks and left the country rather than admit to anyone the pain, hardship and humiliation they felt. Some feel too ashamed, particularly young couples, about letting their families know they are in bother. Desperately trying to cling on to the family home, sometimes they end up resorting to all kinds of things. We now live in a society where fathers are forced to go abroad to seek employment just to earn enough to pay the mortgage, willing to make personal sacrifices to ensure a roof is kept over their family's heads.
We are now in a similar situation to the 1950s. A recently published report stated emigration to Britain is up by 25%. Alas, much of this can be accredited to the hardship and dire circumstances in which people with mortgages and negative equity find themselves. No other solution apart from emigrating seems open to them. The socio-cultural effects of this will soon ripple through our society resulting in fragmented families, inexplicable hardship and a destabilising of the most cherished part of our nation, the family unit.
Distressed selling is becoming a rampant event. Up to 416,000 home owners find themselves trapped in the nightmare of negative equity. Many people simply hand over the keys of their homes to the mortgages providers and just walk away. This is indicative of a very sad situation and, indeed, reflects very badly on our society.
People who find themselves in these circumstances see no way forward. They will never be able to purchase another home. These individuals are highly vulnerable people with the stress and anxiety of their situation taking its toll. My main concern is that some people will not actually see a way out, blinkered by the hardship and frustration of their dire situation, and that the incidence of suicide could take an alarming rise. Consequently, this would put our mental health services under increasing pressure to provide services both to prevent and cope with such occurrences.
A caring, supportive and humane approach is urgently called for and is the only way forward to ensure people in this negative equity-mortgage arrears hell retain their dignity, their pride and, where possible, their homes. Local authorities are obliged to find alternative accommodation for people evicted from their homes. However, local authority housing stock is extremely low at the moment with few, if any, proposals on the horizon to construct new homes while the social housing list grows rapidly.
Unfortunately, there is no one-size-fits-all solution to this problem. Each case comes with its particular and unique set of circumstances. As a result of the recession, the State is incurring huge additional costs in housing support. It makes sense to keep families in the family home by providing help and assistance to them. If families have been forced to leave the family home to rent private accommodation, the possibility is that these families will qualify for, and will be in receipt of rent allowance, the cost of which has increased to over €500 million per year.
In the majority of cases the cheapest and best solution for everyone involved, the family, the bank and the Exchequer, is to keep families in their own homes. Senator Aideen Hayden referred to the Scottish Government's homeowners' support fund. A similar scheme should be established in Ireland to help distressed mortgage owners retain their family home. Scotland's mortgage to shared equity scheme is similar to Ireland's former shared ownership scheme. This scheme was successful in its day and could certainly work again. Under the mortgage to equity scheme, distressed mortgage holders, following an assessment, are required to repay the percentage of the mortgage that they can genuinely meet from their household income. The balance is paid by the Scottish Government, giving it a stake in the property until such time as the home owner can take on the full amount of the mortgage again.
A scheme similar to Scotland's mortgage to rent scheme would entail a considerably larger amount of money from the State as the local authority or housing agency would have to purchase the full amount of the mortgage and the home owner would remain in situ as atenant.
Each of the above schemes, which I recommend the Government evaluate, would take the pressure off the social housing list and allow families to remain in the family home, providing them with a sense of dignity. While this will take cross-departmental and bank co-operation, it can be and must be achieved. The establishment of a scheme to help distressed mortgage holders based on the Scottish Government's schemes would be a sustainable way forward to alleviate the pressures under which people find themselves. If we can bail out our banks - the same banks that encouraged and promoted 100% mortgages to young couples - it is high time that we bail out our citizens. The banks should be obliged to and must participate in the recovery of the economy and help to establish a homeowners' support fund.
Will the Government consider the possibility of putting the funds from rent allowance it would have to pay if a couple were obliged to give up the family home and rent private accommodation towards the cost of these schemes proposed by the Labour Party Senators? The proposed personal debt management agency should be fast-tracked through the Money Advice and Budgeting Service, MABS, as an approachable, impartial agency whereby distressed mortgage holders can avail of the services of trained personnel with expertise in debt management, to negotiate with their lenders, where an efficient, speedy and professional assessment of their personal debt can be carried out and the best solution to address the problem of distressed mortgage holders determined. People in such circumstances should not have a credit blacklisting either.
This mortgage crisis is not only having a devastating impact on those affected by it but also on the wider economy. If there is social justice, can we please apply it to this crisis? Our citizens are crying out for help, a plea that cannot be ignored and must be acted upon before it becomes an even larger crisis. I, therefore, strongly recommend and second this motion in an effort to address this matter in a positive manner, offering those affected some hope and a light at the end of this horrific tunnel.
