Michael McGrath (Cork South Central, Fianna Fail)

I also commend Deputy Ciarán Lynch and the Labour Party on tabling a motion on this pertinent issue. I acknowledge that many people are in a grave financial situation, drowning in personal debt, the principal component of which, in most cases, is the mortgage. People who have lost their employment or are suffering from a loss of income or reduced income through reduced hours or increased taxation in recent budgets, coupled with the fact that many people paid over-inflated prices for their property, have combined with the result that very many people are in negative equity and finding it difficult to make their monthly mortgage payments.

It is frightening to see the statistic that up to 16,000 people are in arrears of 90 days or more. It is clear that while the number of repossessions to date has been low, it is inevitable that there will be a time lag between the onset of the recession and when it begins to affect people, leading to an inability to make mortgage repayments and proceedings being taken by the financial institutions towards repossession. It is also inevitable that we will see more cases, we must be honest about that.

It is incumbent on us, as legislators, to provide assistance in terms of policy in a measured and proportionate way. That is what we must do in a responsible fashion and what this Government seeks to do. It is important to acknowledge that there are already significant supports in place through the mortgage interest supplement scheme, a practical support for people that gives cash to them to assist with their mortgage interest requirements. Almost 14,000 families are benefiting from that today and it is a significant contribution by the State to assist people who are facing difficulties. We are all aware of the good work the 65 MABS office are doing for people who find themselves in difficulty.

The statutory code on mortgage arrears was introduced earlier this year and it contains tangible provisions that are of assistance to people when it comes to their debt. It states clearly that all genuine cases must be handled sympathetically and positively by the lender with the objective at all times of assisting the borrower to meet his or her obligations and that the lender must explore a number of options before initiating any proceedings, including changes to the level of monthly repayment, deferral of the payment itself, extending the term of the mortgage and changing the type of mortgage. All of those avenues must be explored before a lender is permitted under the code to initiate proceedings. It is important that people get every reasonable opportunity to meet their mortgage commitments and we must encourage people, as soon as they think they are in difficulty, to come forward and engage with the institutions and with MABS to find a way to work through the loan and to overcome the difficulties, which are hopefully temporary.

Some Deputies referred to the commitments in the new programme for Government that require further thought and analysis. Some of them have potential, particularly the idea of the bank taking an equity interest in the house thereby releasing an appropriate percentage of the mortgage.

We have a great love of owning our own home in this country, a tradition that does not exist elsewhere in Europe. Over time we will see shifts in our society towards new models of property possession and occupancy and we are beginning to see the roots of that. The model we should work towards is one of maximum flexibility between the borrower and the lender, where the lender is compelled to work with the borrower to identify an appropriate solution on a case by case basis. Such a model, however, cannot involve the writing off of any element of the debt because that would be a dangerous signal to send out. To be fair, no Deputy has suggested that, because many people who are making their mortgage payments are doing so by the skin of their teeth and if we sent out a signal that it was acceptable to miss payments, that there was another way out, it would set a dangerous precedent.

We must have an appropriate response that is sympathetic to the genuine needs of families who are in difficulty to provide a clear path for them to work their way through the difficulty. The last thing any of us wants to see is a family losing its home, the most important asset it possesses.

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