Charlie McConalogue (Donegal North East, Fianna Fail)

I commend the Government on ensuring the Keane report will be debated in the Dáil and properly addressed. It is important to gather the views of people on all sides of the House on this key issue - in many ways it is the most important issue for the country now. We need to ensure that those who are unable to meet their mortgage repayments and may be in negative equity can move on and see light at the end of the tunnel.

We face a stark situation regarding mortgage arrears. The latest figures published by the Central Bank on 29 August indicated that at the end of June there were 777,000 private residential mortgages valued at €115 billion, which contextualises the total size of mortgages here. Of these, 55,000 representing 7.2% of the total were in arrears of more than 90 days. This compares with the 6.3% that were in arrears of more than 90 days at the end of March. Banks recently increasing their variable interest rates has piled the pressure on many people already struggling to meet their mortgage repayments. For people who have lost jobs, the increased pressure of repayments is leading to more accounts falling into such levels of arrears.

The Keane report tries to address the matter in some way, but it does not go far enough and a greater response is needed to address the issue. Unfortunately it relies too much on the banks to try to address the situation. It is unfair for customers to have to rely on banks, which unfortunately recklessly lent in many of these instances in the first place. The customers now have to deal with those and there is insufficient oversight in the proposals from the Keane report to ensure the customer gets a fair crack of the whip.

Last night my party introduced the Debt Settlement and Mortgage Resolution Office Bill 2011. I know the Government accepted it, but something like this will be required to offer a fair structure to address the situation. Under this Bill, it will be possible for people finding themselves in mortgage difficulty to approach the debt settlement and mortgage resolution office and to have their financial situation assessed. In such a scenario, it will be possible for that office to issue a debt relief order in the case of personal debt, and a mortgage resolution order in the case of mortgage relief. This is designed in a way that would offer an outcome to the homeowner that allow him or her to continue to live at home while paying the mortgage.

This office will deal with people on a case by case basis and that will not be a painless process. It is important the message goes out that a pain-free blanket debt write down is not something that can be considered. That said, we must understand people's needs and give relief to those who are in trouble. The debt settlement and mortgage resolution office could fulfil that task very well.

There are many people whose properties may have devalued by up to 50%, but who are in a position to pay and who are continuing to do so. The future for these people is still bleak. We also have to look at how we deal with them, because they did not buy houses or take on mortgages through greed or through a desire to make money. They really were unfortunate in their timing and they were just people who wanted to start a family and set down roots. Between 2003 and 2007, they made a decision to take out a mortgage and buy a property. They did so at a time when the banks were plugging money to them and at a time when economic commentators were saying that property was steady, would continue to rise in price and that we would see a slowdown rather than a fall. The political parties were complicit in this as well. The establishment across the board, from banks to economists to commentators and the political system did not foresee what would happen, although some did. The scenario in which people made the decision to purchase was one where they were assured that everything would be fine if they went ahead with it. Many of these people bought houses for around €400,000 and they now find themselves in a situation where these are worth €200,000. They may be still in jobs and paying the mortgage, but it is crippling them and they see no future in terms of how they can address that.

Our first priority is ensure we address distressed mortgages and try to give those who are currently unable to pay some assistance that can put them on a viable pathway. However, as the European and world wide economic crisis is evolving over time and we try to find new resolutions as we go along, we also have to keep an eye on how we deal with those people who are paying but for whom their mortgage is taking up an unacceptable level of their income. We have to find a mechanism that is not pain free, but releases those people from a future that looks like a financial jail. They see no light and see themselves continuing to pay a massive mortgage with no sign of relief. It cannot be pain free, but there has to be a solution that is fair to them. If our economy is to move on, it will need that segment of the population to be dealt with fairly and to be in a position where they can participate in the economy, build a life for themselves and have a financial future similar to those who did not suffer their bad timing.

I urge the Government to address this matter quickly. It has been in office for eight or nine months and it is now turning its attention to some of these reports. It is absolutely critical that all the parties work together, because people need the issue resolved.

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