Bernard Durkan (Kildare North, Fine Gael) | Oireachtas source

I apologise for arriving late. I was in the Chamber. It is hard to be in two places at once. We do our best.

I entirely sympathise with the story I just heard. We have heard several similar stories, and continue to hear them, not only in the past ten years but also, as far as I can see, into the future. I had reason to bring the matter up in the Dáil this morning with respect to what I see as a new arrogance with regard to some of the mortgages that have been sold on from the original lender to a fund and from the fund to another purchaser. There appears to be a resolution from the lenders' point of view to deal with the situation quickly and arrogantly, regardless of how people suffer and of the fact the banks were the first to create the problem by not ensuring they were lending in accordance with people's ability to pay and the value of the collateral.

We need to bring the Governor of the Central Bank, the financial ombudsman and the regulator before the committee again to find out whether they are aware of what is happening. From my experience, with a few exceptions I will deal with in a minute, the offers made by the borrower to facilitate the lender were never accepted. They were always short. The customers were told that their proposals were unsustainable. From whose point of view? It was from the banks' point of view. They wanted more. They kept putting it off. I have dealt with cases for which, over the course of ten years, reasonable offers were made to liquidate the debt and were refused on the basis that they were not sustainable. Sustainability is important. However, they discovered sustainability late in the day. They could have looked at it a lot earlier. The problem now is that there is a rush by the current owners of debt to push borrowers into financial oblivion. They do not care. Without doubt a different attitude has developed and it needs to be challenged. The committee is in a position to do so and we should do so at the earliest opportunity. We do not have much time left in this session, but I will take any opportunity.

All banks and lenders did not treat people in the same way. Some entertained customers and warehoused debts with no interest attached for many years while others could not, did not and would not do so and continue not to do so. There are variations in the way debt and borrowers were handled by the banks. I can think of some people in the pillar banks who did everything in their power to assist in every way they could and did assist. I can think of other people in the same banks who did not. They did the direct opposite, flying in the face of what was being done.

I am aware of situations where properties were sold from under the feet of borrowers. Corners were and are being cut to facilitate that. For instance, when a repossession order that is five, six or seven years old is available in the courts, they suddenly go to enforce it. It is no longer valid, but they get away with it. Once they have established that, they repeat it again and again. I saw a situation recently where the repossession order was obviously way out of date. I pointed it out. The response was that they do it all the time. The fact that they get away with it all the time proves nothing. The property was repossessed on the basis of the old repossession order and it went on from there. The property was sold. Who had the deeds? The lenders have a hold of the deeds and do with them as they want. They move them around like deckchairs to suit themselves. Anyway, the house was sold. Then someone followed it up and another person wrote back from the lending institution in response, and one line near the bottom of the letter stated that the courts had issued a new repossession order after the event. We all know that is not playing the game. They applied for the new repossession order at the time I pointed out to them that what they were doing was not in order as the repossession order was not valid. To be sure to be sure, the bank went back after the event. The house had been sold. Action needs to be taken in those kinds of cases. We cannot allow institutions away with that kind of thing. It is happening now and continues to happen.

We also need to ensure the regulator and financial ombudsman take more of an interest in what is going on. The two customers spoke about the fact they will never know how much the original bank sold the allegedly impaired mortgages for. Some were not impaired. The reason we cannot know is moral hazard, the theory being that if everyone knew, it would become the arbiter for determining how every other loan would be dealt with. The fact they get away with it does not mean it is right. They impose penalties and hardship on people and are aggressive with people. I was talking only yesterday to a person who was visited on a nightly basis. There was a knock on the door as soon as the person returned home from work, putting pressure on for the mortgage to be paid. The lender eventually forced the householder out of the house as it was not possible to put up with it any longer. It became unbearable. We need to ensure we take control to some extent, insofar as we can, or that we encourage those who have the statutory responsibility to do so, to do the job more vigorously and to stand up for people who are coming under pressure. As long as it is allowed to continue, it will continue.

The last point I will make is that legislation may be necessary. We would then be talking about a template, which can easily be dealt with if we want to do it. It would identify the total indebtedness and arrears and offer a template for addressing the debt from the point of view of the householder. That would remove the variation. At least everyone would or would not get fair play, as the case may be. There is still a need for a vigorous intervention with the Central Bank and the other two personages I referred to.

They have the power and they can do things if they want to. In the heel of the hunt, if we do not make some attempt to defend them and elicit the reasons why the institution that is there for that purpose is not defending them, then we will be at fault ourselves. We need to do something about that. Like everybody else here, including Mr. Hall, I have dealt with these cases for many years. Incidentally, the insolvency agencies do not always win out either. They do not leave a sugary taste in the mouth afterwards.

I am going to deal with what happens. People will normally go to anybody they think can or should be able to help them. That is understandable. Sometimes people get impatient because years can drag on while nothing is achieved. Very often, from the point of view of the borrower, that is the best thing that can happen because they get into a better bargaining position as time goes by. However, it may be the case - more than once - that the unfortunate borrower has to come back to us again after something has failed. That happens all the time. It is a sad situation and it should not be happening. That is where I believe legislation is needed as a safety net to insure against the worst that can happen, and to try to ensure that the borrower or the householder has something to lean on. I have seen situations where a reasonably good argument was made, a good case was made and the lending institution agreed to it, then somebody came along with a better offer, or so they thought, and it did not happen. There is a lot of work that we still have to do and we should to it. We should let it be known to the regulator, the Governor of the Central Bank and the Ombudsman that we are interested and that we need to know more about it.