Mr. David Hall:

I thank the committee for inviting us to attend.

This is one of the only arms of the Legislature that is currently taking the mortgage and personal debt crisis seriously. I am accompanied today by Mr. Stephen Curtis, financial operations manager and qualified financial adviser and personal insolvency practitioner, and Mr. Arthur Mullan and Ms Tracy Mullan, directors and solicitors with the Irish Mortgage Holders Organisation.

The Irish Mortgage Holders Organisation was established in October 2012 as a not-for-profit organisation. In addition to advocating for those in debt, we provide the only in-house, one-stop-shop for debtors where their pockets will not be picked nor will they be feasted upon by any external parties. Behind the statistics with which we deal daily are families directly affected by the impact of debt. Many people whom the IMHO represents have been individually, corporately and as a family destroyed by debt. We would like to put a number of recommendations to the committee in the context of an imperfect and largely dysfunctional system that is dealing with distressed borrowers. These debtors are reliant upon this committee to protect their interests where the Central Bank, Government and banks have failed.

We ask first that the committee recommend to the Dáil that legislation be introduced to compel all lenders in this State to make available to borrowers in mortgage arrears four compulsory solutions, namely, mortgage to rent, debt for equity, split mortgage and no interest on the warehoused amount, and in the event of a property being sold, the residual debt will be resolved at the same time. Not all lenders provide split mortgages. Also, one of the pillar banks, the Bank of Ireland, provides for interest on the warehoused amount which accumulates on a monthly basis and is expected to be paid.

Second, the standard financial statement is too complicated, requires a significant amount of unnecessary information and needs to be urgently revised. Third, the mortgage to rent scheme that helps to keep vulnerable families in their homes should be revised and streamlined. It is overly cumbersome. It is now cheaper for a bank to repossess a family home than to participate in the mortgage to rent scheme. This is a disgrace. We have a client before the court next Monday who is perfectly suitable for the mortgage to rent scheme. I am speaking in this regard of a family of a husband, wife and five children. The lender, despite having pilot schemes with six other clients, is insistent on going through this system to repossess this family's home. This is a wholly unnecessary repossession and must be fought at every turn.

We would further urge the committee to urgently review the personal insolvency process which is too prescriptive and is taking too long in the context of obtaining protective certificates. This is not only about debt but about mortgage and personal debt. All aspects of dealing with secured and unsecured debt must reviewed. Yesterday, we announced a new partnership with Grant Thornton. This will allow all debtors within the State, irrespective of their being current, future or potential mortgage holders, to avail of insolvency services, including bankruptcy, at no charge to the debtor, with the exception of court and Insolvency Service of Ireland fees. This is a ground breaking initiative that will do what the State and the Oireachtas should have been ensuring was being done. The IMHO will continue to provide free bankruptcy services through this initiative, funded through the project, which ultimately comes from creditors' funding.

For the past six years bankers have strangled our economy and society by failing to deal effectively with the mortgage crisis. This has allowed unsecured creditors to run amok, sucking all they can from debtors in a menacing and threatening manner, which has risked mortgage holders losing their homes. Irish people are honest and want to pay their debts. Every effort is being made by those in debt to pay those debts. They are not going on foreign holidays, replacing their expensive cars and spending money putting children through private schools. Often the wrong debt is being prioritised. Rather than creating a system to assist people, bankers have chosen to abuse mortgage holders by calling them strategic defaulters without any evidence. In addition - this might appear strange coming from me - debtors have fallen into a false sense of security. They have not been afforded an opportunity by creditors to deal with them in a humane and structured way.

Politicians and media have innocently raised debtors' expectations that a magic solution is coming, that nothing will happen to them and they are safe. That is not the case. The tide has changed. The code of conduct on mortgage arrears introduced last year was a deafening blow to mortgage holders. No information was forthcoming from the Central Bank in relation to the danger of people being deemed unco-operative. The powers of the Central Bank in relation to targets are again a massive disadvantage to the borrower. After six years of inaction banks are popping up and down trying to tick boxes. The only people who can lose when someone jumps to provide an easy fix to keep the boss and the regulator happy are debtors.

In advance of this meeting we circulated the committee with details of the AIB and KBC joint initiatives. We are happy to discuss these in more detail if members wish. The IMHO has been dealing with every bank on behalf of clients. The smallest amount owed by one of our clients is €26,000 and the largest amount is €52 million. We have found that a wide variety of approaches are being adopted. In my view, the three most difficult banks to deal with on behalf of mortgage holders are Bank of Scotland, Danske Bank and Bank of Ireland. I cannot understand how they are resolving their mortgage arrears by stonewalling all reasonable efforts by debtors and those who represent them to try to find long term sustainable solutions. I ask that the committee question those banks about what restructuring arrangements they have entered into.