John Browne (Wexford, Fianna Fail)

I welcome the opportunity to say a few words on the subject under discussion. I will not be excessively critical of the Keane report because any report before the House which makes recommendations on mortgage resolution is to be welcomed. My only fear is that we may end up with many reports and little action. It is important, therefore, that action is taken urgently to address the problems.

Deputies are aware that tens of thousands of families are experiencing serious difficulties making their mortgage repayments. In August last, the Central Bank published the latest data on mortgage arrears and repossession. The figures were stark and showed that 7.2% of private residential mortgage accounts had been in arrears for more than 90 days at the end of June. Of more than 750,000 private residential mortgage accounts held in the Republic of Ireland and valued at €115 billion, approximately 60,000 had been in arrears for more than 90 days. The comparative figure in March 2011 was 49,000, which indicates a dramatic increase in the number of people falling into mortgage arrears in a three month period.

Deputies are being contacted weekly in their clinics by people experiencing serious debt and mortgage problems. Many of the individuals in question have lost their jobs. Five or six years ago, when they took out a mortgage, they were in employment and believed they would be able to continue to meet the requirements of their mortgage. As a result of the downturn, especially in the construction sector, a large number of individuals with young families have lost their jobs and are no longer in a position to meet their mortgage repayments. This issue must be addressed as it is causing major social problems, including marriage break-up and suicides. People are tearing out their hair wondering how they will meet their mortgage repayments. If a couple with two children are in receipt of social welfare payments, they will clearly not be in a position to meet monthly repayments of €1,000, €1,200 or €1,400. We must make decisions on what measures we will take to assist people in such circumstances.

Rent supplement and mortgage interest relief payments are provided by community welfare officers. The problem is that people are finding it difficult to obtain these supports because they must jump through hoops to prove their inability to pay or demonstrate that they did not increase their mortgage when they should not have done so. If it is shown that they increased their mortgage when they could not afford to do so, they will not qualify for rent supplement or mortgage interest supplement payments. This is causing severe problems.

The Money Advice and Budgeting Service is doing tremendous work assisting people in difficulty. However, it can only provide a certain amount of support and assistance. It can, for instance, make representations on behalf of its clients to banks and building societies to try to reach some form of repayment arrangement, for instance, interest-only facilities or payment holidays for a period of perhaps six months to allow the person time to find a job or alternative sources of funding. These arrangements merely postpone the day of reckoning. In the past month, I have noticed that banks are taking a tougher line with people in mortgage arrears. While they generally show a reasonable degree of understanding for the first year or 18 months of arrears, they adopt a much tougher approach thereafter. In some cases, they are demanding the return of properties. I am aware of families in County Wexford who have returned their home to the lending institution and moved into rented accommodation. This does not make sense, particularly if the families in question are now in receipt of rent supplement. Many families who have accumulated significant arrears prefer to return the property to the lender and enter rented accommodation for which they may only pay €400 or €500 per months.

Local authorities could assist people by playing an advisory role. Every local authority has a housing and loan section, all of which are under-utilised at present because councils are not in a position to built or allocate houses. Local authorities have expertise in housing and loans and should work in conjunction with the Money Advice and Budgeting Service to assist, advise and support families in mortgage arrears.

While the Keane report makes some good recommendations, it is, to some extent, a holding exercise in the sense that it will not be possible to implement some of the recommendations owing to the inaction of the Government and its slowness in introducing some of the legislation required. The potential six month delay in introducing bankruptcy legislation, which will not come before the House until the first quarter of 2012, will cause serious problems for the implementation of the report. The report states, for example, that the reform of the bankruptcy and personal insolvency law is fundamental and notes that the advisory group did not envisage the mortgage problem being resolved without such laws. It is important, therefore, that the Minister enact the relevant legislation as quickly as possible. I understand he indicated yesterday that this will not be done until the first or second quarter of 2012. This will create problems for the implementation of the report.

This week, the Fianna Fáil Party published a Bill to establish a debt settlement and mortgage resolution office and provide an independent, non-judicial debt settlement system for persons struggling with personal debt and those experiencing difficulties with their mortgages. The legislation, which was debated in the House on Tuesday and Wednesday nights, is based on the recommendation of the Law Reform Commission report on personal debt and debt enforcement published in December 2010 and the associated draft personal insolvency Bill. We decided to extend the scope of the insolvency Bill to include the growing problem of mortgage debt. Under the Fianna Fáil Party Bill, a person struggling to cope with personal debt could apply to the proposed new office for a debt settlement arrangement. Following a comprehensive assessment of the person's financial affairs, a personal insolvency trustee would make a proposal to the person's creditors. This is good legislation and while it may not provide all the answers, taken alongside the Keane report and other reports published recently, it could form the basis for a proper resolution to debt problems caused by mortgage arrears.

We must all recognise that families are experiencing serious problems in this regard and in many case there is not a hope in hell that they will be able to meet the repayments demanded of them by their bank or building society. It is incumbent on all parties in the House to offer solutions to the difficulties facing people in order that they are able to rest easy at night in the knowledge that they have made some form of arrangement with their bank or lending institution in an effort to solve their problems. I ask the Minister to take on board some of the suggestions that came from this side of the House as well as the recommendations in the Fianna Fáil Bill. It is important that we work together to resolve this difficulty. It is not one to play politics with but is for working together across the political divide to ensure we solve the problems of people with enormous mortgage debts who are looking to us to come up with solutions.

See this speech in context