Martin Mansergh (Tipperary South, Fianna Fail)

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"notes that:

- legal repossessions of home owners reported by the institutions covered by the guarantee amount to 20 in the first nine months of this year;

- the mortgage interest subsidy scheme provides an important safety net for mortgage borrowers who get into difficulties and that more than 14,000 families are now benefiting from this support;

- the number of home owners in arrears (90 days) with institutions covered by the State guarantee is currently of the order 15,000-16,000 and that the rate of increase in arrears has moderated notably since the early months of this year;

- the introduction of a statutory code of conduct on mortgage arrears earlier this year reinforces existing practices at mainstream mortgage lenders and extends legally obligatory protection to all mortgage borrowers;

- the code of conduct on mortgage arrears already requires lenders to explore alternatives with borrowers in difficulty and prohibits seeking repossession "until every reasonable effort has been made to agree an alternative payment schedule";

- the code of conduct on mortgage arrears already provides that, where circumstances warrant it, the lender must refer the borrower for guidance to the Money Advice and Budgeting Service (MABS) or an appropriate alternative;

- the renewed programme for Government envisages an examination of ways of expanding mortgage support measures and new measures to protect families having difficulties including the introduction of new measures to protect families having difficulties with their home mortgage payments;

- the renewed programme for Government also provides for the existing statutory code of conduct on mortgage arrears and the recently agreed protocol between the Irish Bankers Federation (IBF) and the MABS on debt default to be further reviewed with a view to expanding the options available for dealing with debt situations, including for example, the use by banks and lenders of more flexible mechanisms to avoid foreclosure in appropriate circumstances and that these could include:

- reduced rates;

- longer maturity dates;

- rolling-up of outstanding interest;

- bank taking equity in the house; and

- bank taking ownership and leasing back the property to the resident with rent payments coming off the loan;

- the renewed programme for Government envisages that ways of expanding mortgage support measures will be examined with reference to the measures adopted in other jurisdictions;

- the renewed programme for Government envisages reform of debt enforcement in light of the deliberation of the Law Reform Commission, which has recently published a consultation paper on the matter, the regulation of debt collection agencies, a new system of personal insolvency regulations allowing for a statutory non-court-based debt settlement system, and the establishment of a central debt enforcement office to remove as many debt enforcement proceedings from the courts as possible;

- Irish banks continue to rely on international credit markets for a substantial part of their funding and that conditions in those markets, though easier than earlier this year, remain difficult;

- rating agencies, perhaps influenced by the high rates of default and repossession on mortgages in the US and UK, are known to be sensitive to anything affecting mortgage lending and are aware that it makes up a large portion of Irish banks balance sheets; and

- the introduction of a blanket two year moratorium, as proposed, runs a substantial risk of creating unfavourable perceptions in credit markets about the future performance of a significant part of Irish bank lending, and that such a perception could increase funding difficulties and raise funding costs for Irish banks, with damaging consequences for all of their customers;

commends:

- the Government for its actions to stabilise the financial system and to restore the public finances thereby protecting jobs and home ownership

- the Government for its increased support for the mortgage interest subsidy scheme; and

- the introduction of the statutory code of conduct on mortgage arrears;

expresses its confidence in the success of the Government's efforts to deal with the world-wide financial crisis and its impact on Ireland."

The Government is conscious of the high value placed on home ownership in Ireland and of the efforts Irish people make to secure and retain their own home. Wolfe Tone and Todd Andrews's "men of no property" have become, in 90 years of independence, in most cases the men and women of some property. There has been a huge improvement in housing conditions to which all parties have contributed. I hope the current experience will cure us for good of what Deputy Penrose referred to as seeing residential property as a speculative asset.

The Government's objective from both a social and an economic policy point of view, an objective shared on all sides of the House, is that homeowners who lose their jobs should be assisted to retain their homes during their period of unemployment. This is being done through the application of the new code of conduct on mortgage arrears, support from the mortgage interest scheme under the supplementary welfare allowance system and the provision of advice on debt management through the Money Advice Budgeting Service.

The housing market has been particularly hard hit by the economic downturn. I have a clear recollection in the other House of Deputy Noel Ahern, as Minister of State with responsibility for housing, expressing grave reservations about 100% mortgages, let alone anything higher.

See this speech in context