Kieran O'Donnell (Limerick East, Fine Gael)

It is ironic that we are debating the plight of homeowners who are at risk of losing their homes during Opposition Private Members' time, having regard to the amount of time that was spent debating the NAMA legislation. One would have to question if we have our priorities right. We have all met people who are experiencing such difficulties in our clinics. They are typically young people who bought houses in 2004 to 2006, many of them having been granted 100% mortgages. They have availed of the statutory code of practice from the mortgage providers, but the period covered is due to expire next February. The Government amendment to the motion states that "the number of home owners in arrears ... 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 the year". The only reason it has moderated is because the statutory code of conduct that was agreed with the mortgage providers is preventing that from happening. Furthermore, mortgage interest supplement is being paid by the State to mortgage holders to enable them to keep their mortgage repayments under some control.

For the Government to say that this issue is not a problem shows that it is completely out of touch. It has no idea of what is happening on the ground. This is an extremely serious issue. If the moratorium on house repossessions is lifted, people who have incurred major arrears of mortgage repayments will face difficulties next February. In many cases people are only making interest payments and many people cannot even make those payments. Their mortgage repayments have accumulated and they face major arrears of payment. They are under severe pressure and in many cases one partner has lost his or her job and in some cases both partners have lost their jobs. This will have enormous repercussions for the banking sector and for home owners. We are talking about people's homes.

People were encouraged by the Taoiseach, Deputy Cowen, when he was Minister for Finance, to buy houses, on the basis that the fundamentals were sound. People took him at his word and bought houses that were grossly overvalued. Some people obtained their mortgages by a range of means, through subprime lenders, mortgage brokers and the guaranteed banks who granted them 100% mortgages at factors of five and six times their income, which were ludicrous. No proper stress testing of mortgage applicants was done.

The Government was remiss in not working with the Central Bank to impose stricter capital ratio requirements to prevent the banks from giving 100% mortgages. The Minister of State who is present understands this very well. Such stricter regulatory requirements were imposed in other countries, including in Spain and in Canada. The major beneficiary of all the houses that were built was the Government. It received €30,000 per unit sold. Every sale was like all three bars coming up on a slot machine for the Government. It got €90,000 for the sale for three houses. Ultimately it was negligent, its thinking was short-term and it took the easy option. We are now borrowing €26 billion, virtually half of our current expenditure this year, just to keep the country afloat.

The other consequence of the Government's actions is that people are fearful of losing their homes. Countless people at this stage have fallen into negative equity. The ESRI forecast that 200,000 will be in negative equity by next year. Some 25,000 families face repossession of their homes. The Minister had the gall to say there is not a problem in this respect. A severe problem is coming down the tracks, as a consequence of the NAMA legislation. We need to be mindful that this affects real people's lives, their homes and their families. A man and woman's home is their castle. The Government has created a situation where these people are at risk of losing their homes. The Government is saying that it is not its problem, it did not cause it. It provided the mechanism of a lack of regulation to allow this to happen. Furthermore, the Taoiseach, Deputy Cowen, was a cheerleader and said, "Build on, buy on, we will all benefit". The only person who benefited was the Minister for Finance in terms of the public coffers.

We in Fine Gael have put forward a home owner scheme. We are pleased to be given this opportunity by the Labour Party to support its motion and speak on it. We want to put on record our proposal to put in place a homeowner scheme. We believe a moratorium on house repossessions is important. A mechanism must be put in place to deal with this issue. We propose to allow NAMA to do something of major use, to support home owners. It should compulsorily buy properties from mortgage companies, allow people to continue to live in their homes, take a discount on buying the mortgage and allow the people to buy back their homes if they are in a position to do so, but at least allow them to have the security that they will not risk being thrown out of their homes, which would be soul destroying for people.

Our amendment in this context to the NAMA Bill was ruled out of order because it posed a charge on the Exchequer. Significantly, the charge it would pose would come nowhere near the charge posed to the Exchequer by NAMA. This House must get its priorities right. The key term here is "equity". There must be equity in everything we do here for all the people we represent. That has not happened to date with the Government. We must do something for home owners.

See this speech in context