Brian Stanley (Laois-Offaly, Sinn Fein)

I wish to address the statement by a previous speaker concerning the political system and establishment. The Deputy said that political parties en bloc went along with the reckless lending and said nothing about it. Any examination of the record, however, will show that on a number of occasions Sinn Féin did raise concerns about reckless lending by banks. Other parties may not have done so, but my party did raise concerns on many occasions. However, it did not get much of a hearing thereon, either in the House or the media.

The Keane report, as it stands, will do nothing to solve the problem. It is deeply disappointing to the almost 100,000 families experiencing mortgage arrears and mortgage distress. It does not provide anything close to a comprehensive solution to the issue of mortgage distress, but that is what we need to solve the crisis. The main proposal made in the document is that those in mortgage distress should be left at the mercy of the banks and saddled with decades of unsustainable debt which they will probably never be able to pay.

In recent weeks I met a couple who borrowed €180,000 three years ago from Start Mortgages. At the time the man was 59 years old and working on a community employment scheme, while the woman was 47 with a health problem. Their income was €23,000. The man is now 62 years old, while the woman is 50 with serious health problems. Their income is approximately €320 per week and they have a debt of €180,000. I am highlighting this problem to demonstrate the crazy circumstances that obtained. Somebody from Start Mortgages should be standing before the High Court for granting such a loan. One could say the couple was foolish to take out the loan, but agents for mortgage companies were showing up on doorsteps with glossy brochures and shiny briefcases enticing people to take out loans. These are the circumstances we face.

People waited to see whether the Government would provide them with the solutions it stated it would provide; however, they have been given nothing but a tokenistic, minimalist response that will not do anything to relieve their mortgage distress, as set out in the report. It is astonishing that although three reports have been produced in two years, their main conclusions recommend leaving the fixing of the problem to the banks, despite all that has occurred in the country. The Government parties, Fine Gael and the Labour Party, are clearly happy to pick up where Fianna Fáil left off. The report has explicitly ruled out a number of Fine Gael and Labour Party commitments in the programme for Government such as increasing the mortgage interest supplement, extending mortgage interest relief and transforming MABS into a personal debt management agency with strong legal powers. There are no proposals to insulate mortgage holders from ECB interest rate increases.

We must have a solution. We believe there is a better way. Sinn Féin has long argued for a strengthened distressed mortgage resolution process with a stronger code of conduct for mortgage lenders. This process must be backed up by an independent distressed mortgage resolution board to ensure decisions taken by lenders represent an appropriate response to the problem of mortgage distress. Where such a response is found to be wanting, the board should have legal powers to ensure the right solutions and penalise the lenders for failing to act and engage with clients in an appropriate manner. Mortgage lenders must absorb a significant proportion of the losses to the value of the mortgages, particularly those outlined. We do not believe the taxpayer should foot the bill for the mortgage crisis, nor do we believe it is necessary for the taxpayer to further compensate the banks for the loss in value of their residential mortgage loan books. There is sufficient capital in the banks to absorb a significant proportion of these losses. The taxpayer has dug deep in his or her pocket to ensure this.

The priority of the Government should be to keep people in their family homes. I heard the Minister of State say this. Other priorities should be to provide appropriate alternatives, ensuring debt sustainability and a sharing of the burden fairly, because these would provide the basis for a solution to remove the causes of the mortgage crisis that was both fair and sustainable for borrowers, lenders and the taxpayer.

I asked the Minister of State to address the issue of loans taken out from local authorities. I highlighted this issue in the Chamber a number of weeks ago. I hope the Government will take this issue on board because there is a considerable problem backing up. This is not just because of repossessions of local authority homes but also because local authority balance sheets will be seriously impaired. The money is borrowed from the Housing Finance Agency and if the lenders are unable to repay the money to the local authorities, the latter carry the loss on their balance sheets. As we all know, local authorities are seriously stressed owing to the difficulty associated with the collection of rates. The current state of the public finances presents another problem. I cannot overstate the extent of the problem for those caught in the trap I describe. It is not just a financial problem; it is also affecting people's physical and mental health and relationships. I am sure all Deputies are hearing this in their clinics. The problem is having serious repercussions and manifesting itself in a cost to the health service; there is both a human cost and a financial cost. I appeal to the Government to take this on board.

Some 25% of the clients of one local authority are in serious arrears. Some 33% of those who took out shared ownership loans have serious problems. Their debt is mounting on a monthly basis and there is no way out. The local authorities are trying to work with householders to keep them in their houses, but this is proving very difficult. While we all can complain about what is happening, I appeal to the Government to address it. Shared ownership loans are loans over which the Government and the Department of the Environment, Community and Local Government have direct control. The rent element of these loans is increasing by 4% year on year, which is compounding the problem. The Government should first stop these increases and determine whether it can adjust the ratios such that the rental fraction could be increased from 50% to 75%, 80%, or 100%, if necessary.

When a house is repossessed, it is boarded up for months or years on end, with a consequent effect on neighbours. Oireachtas Members, the Garda and local authority members receive calls about this issue. A repossessed house loses value and by the time it is sold the local authority has taken a big hit owing to the loss of equity. This affects it financially. The family removed from the repossessed house must be given a rent allowance, placed in local authority housing or on the ever growing waiting list therefor. This is in nobody's interests. The taxpayer is picking up the bill for rent allowance, which is absolutely ludicrous. I appeal to the Minister of State to take this massive problem on board.

The Minister of State made some strong statements, but I appeal to him and the Government to move beyond the Keane report. He says it is just a start, but it is totally inadequate. The Government should try to get on top of the overall problem.

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