Maureen O'Sullivan (Dublin Central, Independent)

It is very significant that as well taking statements on the interdepartmental working group on mortgage arrears this week, at the same time Fianna Fáil is tabling a Private Members' Bill on debt settlement and mortgage resolution.

We have taken far too long to get to this point. The issue of mortgage arrears and difficulties did not happen overnight, so this debate is long overdue. Perhaps the situation would not be at crisis point for many mortgage holders if the situation had been treated swiftly and efficiently when the cracks began to appear in the system some years ago. In his discussion on the Private Members' Bill, Deputy Michael McGrath made the point that it is a duty for all of us, whether in a political party or not, to try to come up with solutions to assist those struggling with high levels of personal debt, and those having difficulties in making mortgage repayments on their family homes, that there is a need for this debate not to be a "them or us" debate, Government versus Opposition, but that all suggestions should be listened to in order to bring about a solution.

There are those who say that people chose to take out 100% mortgages for houses that everyone knew were not worth half that amount, and in some cases were not worth even a quarter of that, and that we should acknowledge personal responsibility. That has to be balanced with the arguments that banks and financial institutions practically threw money at people, with no real discussion of the implications and the "what ifs". There were no allowances for job losses or for the slump in the market. Who at that stage would not have taken the opportunity to have a 100% mortgage? Media hype also contributed to the crisis, as people were told that they had to get on the property ladder and that if they did not do so now, they would lose out. The hype was that the good times would last forever, and we know that does not happen. The crisis was also fuelled by bad planning decisions, tax breaks, property speculation and the property bubble. We know that bubbles burst, and this one certainly did.

The interdepartmental group on mortgage arrears was composed of civil servants who are probably on a salary scale and with many years of service, and so not unduly affected by mortgage difficulties. Bankers were also on the group, while the chairman was originally with an accountancy firm. I am amazed it did not strike anyone that when discussing mortgage arrears, they might talk to those in arrears. The bankers will come at this problem from a banking perspective, and who welcomed the report? The Irish Banking Federation welcomed it. We know that bankers are into making profits, often at the expense of the customer.

Who should have been asked to contribute to the report? I would have suggested a random selection from a variety of banks of those in arrears with various types of difficulty, and organisations like MABS, the Society of St. Vincent de Paul and FLAC, which are in direct contact with people who are struggling. The policies and practices of banks and bankers have brought about the problem, yet we are expecting them to come up with the solution. They will come up with solutions, but for whose benefit?

The need for an independent body is worth considering, and this was in Deputy McGrath's proposal and in the Keane report as well. That independent body is vital. It will look at each case, listen to the bank situation, listen to the householder in arrears and then come up with proposals for restructuring or solving the problem.

I looked at the MABS response to the Keane report, and I know that the Minister has some reservations and made some points about MABS in his statement. However, I think the service has much to contribute. It has been in existence for 20 years. It has been giving expert advice to families struggling with managing money and dealing with debt. The service has a skilled staff with much expertise, but most particularly, it comes at the matter with people in mind, and not just figures on the balance sheet. As debt matters worsened in recent years, the State looked to MABS for its expertise in the area of indebtedness, and MABS responded, so I do not understand why its representatives were not included on the group that produced the Keane report. People were turning to MABS at the time the report was being compiled as their banks and their financial institutions were letting them down and were not considering the human cost. I share the disappointment expressed by the representatives of MABS that they were not included and that the Keane group did not seek their expert advice. My understanding is that MABS is an international model of good practice in debt resolution.

In its own report, MABS welcomes the provision of additional resources to assist families in mortgage difficulty, but makes the important point that those in mortgage difficulty are also experiencing difficulties with other types of debt. That brings me back to the irresponsibility of lending institutions in throwing money at people. Yes, people took the money, but there is a major "but". At least the Keane report tacitly acknowledges the relationship between mortgage debt and other types of debt, so MABS calls for a total solution if we are really looking for effective solutions. Mortgage arrears must be dealt with along with the arrears along the issue of personal debt, so there is a need for a comprehensive and complete solution, where the debtor must be given the right to regain control of his or her finances. The report suggests 100 additional advisers and protocols, but I hope they will not be buried in layers of bureaucracy. I hope they will work with the MABS advisers and within that process.

The Keane report appears to suggest that the mortgage advice services could be linked with MABS. I agreed with the AIB comment that all solutions, short term or long term, need the customer working with the lender to reach a solution. Working "with" is the key. The bottom line is that people paid astronomical prices for houses. This began in 1999, but the situation became much worse after 2003. It is far too late to be dealing with the situation, because the writing was on the wall years ago. Those who bought their homes between 2003 and 2007 played a totally uneconomic price in a false market. That has led to Ireland having an extremely high, if not the highest household debt per capita in the developed world. If the mortgage loans are too high, they cannot be repaid.

We cannot confuse the word "home" with those who are speculators on the property market and who bought property to let for tax purposes, or holiday homes here and abroad.

I am talking about helping people to hold on to their homes. If their incomes are declining, they cannot repay crippling mortgages that should never have been given in the first place.

Repossession has been discussed but I do not believe it is an option as it would place an intolerable burden on housing authorities. As someone who is involved with Dublin City Council, I know the housing lists at this stage are far too high and to add more people to the waiting list would cripple the system. The other question is what will happen to repossessed properties. That will leave room for speculators of the future.

We are in difficult times and they may get worse. Mortgages are based on ability to pay so if people are losing their jobs or have reduced working hours, their ability to pay is seriously affected. Rising prices will also affect them seriously. A range of tools is needed to deal with this situation, including debt forgiveness which should be considered in some cases. We must acknowledge the need to write off certain borrowings which should never have been allowed in the first place.

The bankruptcy laws need to be reformed. Other suggestions include trading down mortgages, splitting mortgages, selling by agreement, interest-only arrangements, mortgage-to-rent schemes and extending the years of a mortgage. Part of the proposal has approved housing bodies taking ownership of houses in certain circumstances, and the leasing of houses by banks to local authorities if that is deemed to be more appropriate. I know there is going to be an announcement on this. I have doubts about it and only time will tell if it will work. The bottom line is that there is no one-size-fits-all solution.

The Minister's report referred to forbearance and it is important to acknowledge that circumstances do change. They have changed for the people who took out mortgages in the past, so circumstances could change again and we must allow for that.

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