Thomas Byrne (Meath East, Fianna Fail)

The banks with certain exceptions are working with borrowers. That is not to say what the banks are doing is always right; there are many flaws to their approaches to the matter. By and large, on a case-by-case basis, the main banks covered by the State guarantee are working with their borrowers.

I propose that the mortgages of the sub-prime lenders be bought by the main financial institutions. Those with such mortgages are the most vulnerable in the repossession situation, examples of which we saw on television yesterday and in today's newspapers. They are the people who are getting the constant calls from their lenders. That is not happening, from my experience at constituency level, with the main banks.

However, because of fears propagated people have become afraid of repossession. Last week a constituent attended my clinic who had built up several months of arrears and had received letters from her bank. She knew nothing, however, of the 12-month moratorium that applied to her lender, ICS Building Society. When I gave her this news, it gave her meaningful hope. This is the message we must get across.

The banks are dealing with repossession cases on an ad hoc basis. When I checked the website of CitiMortgage, a major US mortgage provider, its most prominent part was its home owner assistance programme which sets out the standards on how it deals with borrowers in arrears. This was in strong contrast with the Irish banks' ad hoc approach. Their websites do not contain any information on assistance for borrowers in arrears.

I welcome the assistance measures detailed in the programme for Government, particularly in cases where the State or the banks could take part ownership of the House in exchange for reducing the mortgage. That will be an attractive proposition for many borrowers which will serve to give them hope and encouragement that they will retain their houses. It is noteworthy that only 20 houses have been repossessed by banks covered by the State guarantee. This debate must show people with mortgage arrears there is hope and the banks will work them if they are prepared to work with their banks. The code of conduct on handling mortgage arrears has worked well but there is room for improvement. The one missed payment is not enough. It should be six months or 12-months cumulative arrears rather than the Labour Party's proposal for two years.

The programme for Government contains proposals for reducing rates, longer maturity dates and banks taking equity in houses under a rent and lease back scheme. Many constituents have suggested these to me but these need to be systemised into a proper format. However, we must give people in arrears hope and not unnecessary fears of repossession.

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