Robert Troy (Longford-Westmeath, Fianna Fail)
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It is outrageous that the Government is not dealing with mortgage arrears as a priority. We will face an unbelievable problem in the new year, when thousands of families will be evicted from their homes because of mortgage arrears. The number of family mortgages in arrears of longer than 90 days has doubled since this Government came to office. The number peaked at 12.9% of all mortgages in September 2013 and has fallen only slightly since then. A total of 74,192 mortgages are in arrears of more than six months and 37,484 families are in arrears of more than two years. These people are in real danger of having their family homes taken from over their heads. The Government is stuck in a mode of thinking whereby the banks are allowed to dictate the pace and the nature of the restructuring arrangements. The banks' response to the Government's mortgage arrears resolution targets programme was to step up legal proceedings.

In response to the banks' actions there is a need for a clear definition of what is a sustainable mortgage and much greater standardisation in approach.

The Government heralded two major initiatives to tackle this issue, one of which was the mortgage to rent scheme. To date, that scheme has dealt with 50 applications, even though there are tens of thousands of people in arrears. The second brainwave or initiative of the Government was the Personal Insolvency Act 2012. When this legislation was going through the House, the then Minister for Justice and Equality, Deputy Alan Shatter, estimated that in its first full year of operation the Insolvency Service of Ireland would have 21,000 applications for debt resolution. To date, there have been only 311 applications. Therefore, t is not working and the reason it is not working is that the power has remained with the banks.

I will offer the Minister two examples involving two constituents I have dealt with recently. One took out a loan of €135,000 to buy an apartment. That was the value of the apartment at the time. Today, it is valued at €50,000. That man is lucky to be working and he approached the bank for some help. Its offer was a take it or leave it choice. It wants €1,000 per month for 30 years. That is €360,000 for a loan of €135,000 for an apartment worth €50,000. The banks have the power to say "take it or leave it." My other constituent was seeking to enter the mortgage to rent scheme. The bank, permanent tsb in this instance, offered the market value of the house to a housing body and intended to put this lady in the house. She was going to pay rent to the housing agency and then pay a mortgage on the difference between what was owed and what the bank was giving the housing authority. She would have been €500 per month worse off. Again, she was told she could take it or leave it.

I understand this is not the Minister's Department or his direct responsibility, but somebody must tell the Government that it must wake up. This crisis is very real. It is wrong that tens of thousands of families are approaching the Christmas period thinking that this will be their last Christmas in their family home.

Damien English (Meath West, Fine Gael)
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I welcome the opportunity to speak on this important issue on behalf of the Minister for Finance, Deputy Michael Noonan, and to set out recent developments in this area.

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 this is having on these families and their lives. As the Minister said previously, we cannot have a situation where some families are living under the stress of mortgage arrears, unable to enjoy even a modest standard of living and excluded from participating in the economy and effectively living their lives because of their debt problem. It is important to note, however, that there are relationship frameworks in place with the State owned banks which preclude the State from intervening in the day-to-day operations of the banks or their management decisions.

The Government has developed a comprehensive cross-departmental strategy to support households in arrears, in line with the main recommendations of the 2011 Keane report. The primary focus of the strategy is to support those homeowners in difficulty with their mortgage repayments. The implementation of the strategy is overseen at Government level by the Construction 2020, housing, planning and mortgage arrears sub-committee which is chaired by the Taoiseach and at official level by a mortgage arrears steering group which is chaired by the Department of Finance. The Government's strategy is built around the four pillars for action as recommended in the Keane report. These are: engagement with the banks to develop appropriate measures for their customers in mortgage arrears; personal insolvency law reform and implementation; mortgage to rent; and a mortgage advisory function. A number of key measures have been advanced in this regard. It is worth noting, however, that of the 760,238 private residential mortgage accounts for principal dwelling houses, PDH, in the Republic of Ireland, some 117,889 accounts or 15.5% were in arrears at the end of September.

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 for mortgage holders who are being presented with long-term mortgage resolution proposals by their lenders. This advice is provided by qualified accountants drawn from members of the main accountancy institutes in Ireland who have agreed to participate and support this independent service. We must encourage people to avail of this service. Like the Deputy, I am dealing with clients who are not engaging fully with the service and who have been offered solutions but who require proper advice. They should avail of the service, if they can.

The Central Bank has put many protections in place to ensure people in mortgage arrears are treated fairly by the banks, including the code of conduct on mortgage arrears, CCMA, and the mortgage arrears resolution process, MARP. The key indicator of success in dealing with mortgage arrears is the development and application, where appropriate, of long-term solutions. In March 2013 the Central Bank published the mortgage arrears resolution targets, or MART framework, which set out the performance targets for mortgage arrears resolution at six mortgage lenders - AIB, Bank of Ireland, permanent tsb, Ulster Bank, KBC Bank Ireland and the ACC. Under this rolling process, quarterly performance targets have been set to require the banks to propose and put in place durable long-term solutions to address individual cases of mortgages in difficulty where the mortgage is more than 90 days in arrears. In that context, the Deputy will be aware that the Central Bank set progressive targets in 2013 and throughout 2014 for banks in respect of the numbers of proposed and concluded mortgage restructure arrangements. The most recent information from the Central Bank is in respect of the end of September 2014 targets and proposed solutions and indicates that the banks have exceeded their targets under the three headings.

The MART initiative has resulted in significant numbers of long-term restructured arrangements being put in place. At the end of March 2013, when the MART targets were set, Central Bank statistics showed that 79,600 restructures were in place for principal dwelling houses; at the end of September 2014, this number had increased to almost 110,000 restructures. There is some progress, but I accept that not everybody is getting the solutions he or she needs. The Central Bank's latest mortgage arrears and restructures publication for the end of the third quarter of 2014 shows that the number of mortgage accounts for principal dwelling houses in arrears fell for the fifth consecutive quarter. That is slightly different from the information the Deputy has provided, but we can reconcile the figures, if he wishes. However, there has been a decrease. A total of 80% of the PDH mortgage accounts classified as restructures were deemed to be meeting the terms of their current restructuring arrangement, which is a significant achievement for all involved. I hope that will progress.

The Deputy referred to a case regarding the mortgage to rent scheme. Perhaps he might forward the details because it does not sound like the way the scheme is supposed to be administered. I will have it checked for him.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I thank the Minister of State for offering to have the individual case checked. That is welcome. However, the Minister of State still does not understand. He referred to a website. That is damn-all good for somebody-----

Damien English (Meath West, Fine Gael)
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There is a helpline.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I will deal with the three mechanisms the Minister of State mentioned. The website is no good for somebody who risks losing the roof over his or her head.

With regard to the personal insolvency legislation, the point is that the power rests with the banks. The banks' sole objective is to return to profitability and they do not care about the consequences for families throughout the country. The banks' response to the mortgage arrears resolution targets programme was to issue letters with threats of legal proceedings to the people concerned.

The Minister of State referred to restructuring. It is acknowledged that there has been some restructuring, but we do not know how sustainable that restructuring will be. I gave an example of what one of the banks had done with one of my constituents. The banks have added the arrears to the capital and just extended the period of time. If the people involved could not afford the mortgage in the first instance, how will they be able to afford it plus the arrears over a longer period of time?

My party put forward real and progressive proposals to solve these problems. One was to establish an independent arbitrator who could instruct the banks to take a particular course of action. It would remove the power from the banks and give the people who had got into difficulty through no fault of their own a better chance of securing a sustainable solution for the future. Consider what is expected to happen next year. According to a recent report, a number of buy-to-let mortgages that were taken out during the boom with interest-only repayments are due to revert to interest and capital repayments. In some instances, the repayment will be quadruple the current repayment. I am told that will happen next year. This will lead to more problems as investors will sell rental properties. That will leave more people out on the streets and we already have a homelessness crisis. We must amend the personal insolvency legislation to remove the banks' veto over a resolution.

Damien English (Meath West, Fine Gael)
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I will raise the Deputy’s concerns with the Minister, who will have time to read over the debate. He is sorry he could not be here. The Deputy asked whether the restructures were working. The review shows that 83% of restructures are meeting their terms and my evidence as a Deputy matches it. That would generally mean they are working. I have had very few people coming back to me who are in difficulty with a restructured arrangement. Naturally, they try to have the mortgages restructured at a level they can manage. Most cases we are dealing with in our offices are ones for which there is not yet a restructured arrangement. The Deputy is right that we need to keep an eye on it.

The idea of the restructures, in some cases, is to find a long-term solution, and it may involve adding arrears to the capital. It is also about making the mortgage sustainable in the short term, reducing the person’s monthly mortgage payment, giving him or her a chance, hopefully, to get a job and try to get back into it. We must watch it. The guidelines are very clear that repossession of the family home is a last resort, and it is wrong of the Deputy to say tens of thousands of people will be homeless as a result of repossessions in the new year. This is inflaming the situation. While there are difficult situations, there are rules to deal with them. There is always room to improve the scheme.

Robert Troy (Longford-Westmeath, Fianna Fail)
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They will lose their homes.

Damien English (Meath West, Fine Gael)
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The figures for the past couple of years have not shown this. The Deputy raised the issue of buy-to-let properties and I can ask the Minister to reply to him on that directly as it is separate. Most of the initiatives we have put in place are to protect the family home. We have put codes of conduct in place, which have been addressed. The Deputy is scaring people by talking about tens of thousands of evictions. It is not the case.

Robert Troy (Longford-Westmeath, Fianna Fail)
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Almost 40,000 people are in arrears of two years.

Damien English (Meath West, Fine Gael)
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Three years ago some of the Deputy’s party colleagues told us there would be tens of thousands of repossessions, but this has not happened. The Deputy is scaring people. While some people, after all the efforts, may have to give up their family homes for whatever reason, it will not be tens of thousands. It is wrong to give that impression. The Government inherited this mess and is dealing with the mortgage crisis as best it can. A range of measures are in place. Every effort is being made to protect family homes, and it is a little unfair to say tens of thousands will lose their homes.