Mr. Paul Joyce:

I thank the committee and officials for the opportunity to address the committee on what, by common consent, is an extremely urgent issue. It is welcome that the committee has been appointed to examine these issues. Our emphasis primarily is on the mortgage arrears problem. It is the issue in connection with housing and homelessness with which we are most familiar, and the potential danger of loss of accommodation leading to potential homelessness. Our presentation looks at a few social welfare issues and also some legal aid issues and mentions the right to housing. I am conscious that members have had a long day with many presentations so we will skim over our submission.

We do not work in the broader housing area. We support and respect greatly a number of the organisations with which the committee will be familiar, from charities and NGOs dealing with homelessness campaigning and services to a number of our colleague independent law centres, organisations such as Threshold and all the housing associations working throughout the country. On the broader housing issues, we have a couple of very short observations. First, we believe that the privatisation of the housing market into a mortgage lending market is the main cause of the housing crisis that we are dealing with.

We can also see evidence of a supply problem and concerns around development finance, planning and regulatory issues, and obviously each of these issues needs to be addressed. We are of the view that rent certainty measures are unlikely to have any real effect on increased rents and associated evictions until the private and public housing supply is dealt with.

With regard to the mortgage arrears issue, we have presented a number of sets of statistics - damned lies and statistics and so on - which I will summarise. The clearer problem at present is the two years-plus category and the one year-plus category. One particular figure of importance is that the number of principal dwelling house mortgages in arrears over two years has grown exponentially as a percentage of the overall arrears total. It is now 40% and if one adds the one-year to the two-year category, it comes to over 50%. It is very clear where the intractable problem lies. It is in the two year-plus category, and the average amount owed by those accounts is considerable. It is 36,000 accounts. We do not know exactly how many households that is but we think it is fairly close to 32,000 or 33,000 households in danger of loss of accommodation, and that is an extremely urgent problem.

There has been a lot of restructuring over recent years but just because a mortgage has been restructured does not mean it is out of the woods. In our view there has been an over-reliance on split mortgages and particularly on the capitalisation of arrears as a sustainable restructure. There is already evidence of a number of these accounts getting into difficulty although they are restructured.

With regard to actual possession orders which have been executed, contrary to popular belief, there have been 1,300 in the past three years. There have been 2,300 voluntary surrenders of family homes. That is 3,600 family homes that have gone back to lenders in 2013, 2014 and 2015. We do not believe anybody is tracking what happens to those households once the property has been vacated.

There is also a clear and seemingly increasing problem in the buy-to-let sector with 1,500 buy-to-let mortgages repossessed in that three-year period, of which more than 800 were in 2015 alone. This is a growing problem with approximately 6,000 rent receivers brought in on buy-to-let properties.

The principal instrument for resolving mortgage arrears up to now has been the Central Bank's code of conduct on mortgage arrears, about which quite a lot of information is contained in our presentation. We believe it has been ineffective and very unbalanced with the balance of power remaining very firmly with the lender at all times. I can go into this in greater detail with members during the question and answer section if the committee wishes. For us it is a fair procedures nightmare and it would not stand up in a court. In many cases there is very little given to borrowers by way of proper written information about the decision-making process. Most important, there is no right of appeal to an independent third party.

To complicate matters further, in May 2015 the Supreme Court decided in the Dunne and Dunphy cases that the code of conduct is not admissible fundamentally in legal proceedings, apart from the necessity to comply with the three-month moratorium. This means that when one is faced with repossession proceedings, non-compliance with the code is of no huge use as an argument in the courts. I would like to take a brief moment to quote from the decision given by the Supreme Court in the cases of Irish Life and Permanent plc v.Dunphy and Irish Life and Permanent plc v. Dunne and Dunne:

If it is regarded, as a matter of policy, that the law governing the circumstances in which financial institutions may be entitled to possession is too heavily weighted in favour of those financial institutions then it is, in accordance with the separation of powers, a matter for the Oireachtas to recalibrate those laws. No such formal recalibration has yet taken place.

The Supreme Court is saying it is up to the Legislature to legislate in this area and the courts will not invent defences for borrowers. We know that in courts throughout the State, county registrars are doing their best to prevent the unnecessary repossession of family homes, but they are fighting against the tide. There is a new scheme of legal and financial advice about to be rolled out.

However, we would call into question at this point what use it will be fundamentally in the long run for borrowers to have access to this legal advice service when, first, anecdotally, only approximately 10% of borrowers turn up and respond to the proceedings and, second, because of the Supreme Court's decision. We believe - it will be no surprise - that there needs to be serious legislative amendment and we have listed a number of recommendations. We think the code of conduct on mortgage arrears should be a ministerial regulation expressly admissible in legal proceedings. We have been on the record saying that for many years at this point, going back to 2010.

A mortgage rescheduling tribunal should be set up to deal with appeals from decisions under the mortgage arrears resolution process, MARP, and should have the statutory power to impose solutions where necessary, including debt write-down. The one thing that is not happening is people remaining in their homes with a debt write-down, where the amount owed is reduced to something resembling the current market value of the property, which is provided for under the Personal Insolvency Act 2012.

Borrowers must be entitled to a full range of services, both financial and legal advice, to make their cases. The hearings need to take place in private. For those whose mortgages are manifestly unsustainable, access to an expanded and beefed-up mortgage-to-rent scheme seems to be absolutely essential at this point. The State needs to take responsibility and show leadership in terms of promoting access to these services as a way to finally solving a personal debt crisis that has been going on now functionally for about a decade.

A number of social welfare reforms are required. Mortgage interest supplement might be usefully reintroduced in cases of short-term arrears. There are cases still going into arrears for the first time. There has been a lot of discussion of the rent supplement and housing assistance payment, HAP, caps. Again, and as a temporary measure, it is agreed that those payments need to be increased. It is not a long-term solution but it will help in the short term. We believe the social welfare payments for those under 26 years of age causes serious danger of incipient homelessness. According to Focus Ireland, some 600 people under the age of 26 are homeless now. We support a legal right to housing, whether in the Constitution, through legislation or, belt and braces, through both.

FLAC has always been an organisation that focuses on improved civil legal aid services and has always campaigned for improved civil legal aid. The failure, for example, to have legal aid available for local authority tenants faced with eviction really is something that needs to be immediately redressed.

As a final observation, it is obviously very welcome that this committee has been formed. We are a little uncertain as to why it is only on a temporary basis. Given a senior Minister with responsibility for housing has been appointed, it would be a good idea if this committee existed on a semi-permanent or permanent basis to monitor the plan that is to be put in place. I thank the committee for its attention.