Joan Collins (Dublin South Central, People Before Profit Alliance)

I am a member of the Defend Our Homes League which was established in July in response to the crisis people are facing in respect of repossessions and evictions. The membership of the league comprises, among others, New Beginning, Irish Homeowners Unite and many of the Independent Members. The league was formed as a result of the fact that everyone was aware a crisis was developing in respect of mortgage arrears and because people are under massive financial pressure. That pressure includes the cost of trying to get one's children to school, put food on the table, and so on. These issues were the subject of much discussion on the doorsteps during, and even prior to, the recent general election campaign.

The steering group of the Defend Our Homes League met on Tuesday night last and its members were absolutely appalled by the report. I use the term "report" but it has actually become a discussion document. This is similar to what happened when the jobs budget became the jobs initiative. The Government has not dealt with this matter in a proper way. The discussion document before the House should never have been published without the people who are affected by the problem of mortgage arrears first being consulted. MABS and FLAC, which have come out strongly against this discussion document, should also have been consulted.

The discussion document before the House has been warmly welcomed by the banks. Indeed, it could have been drafted by them. It does not call on them to do anything more than they are doing at present. In many instances, they are not even doing what is required of them. The so-called recommendations contained in this document are mere guidelines. The two main issues relating to the matter of mortgage arrears are keeping people in their homes and negative equity. Neither of these is properly dealt with in the discussion document, which is completely dismissive in the context of negative equity and states that the write-down would be too expensive. I challenge that opinion and ask in whose interest it is too expensive.

The first point I made was related to keeping people in their homes. The report disgracefully accepts that repossessions will happen and that after a bank has taken possession of a person's home, it may be possible for that person to rent the property from it, with the debt remaining as a heavy weight on his or her shoulders. That is an outrageous idea. The Government should ensure that if a debtor engages with a lender and is prepared to pay a reasonable amount of net income - this should be decided not by the banks but by an independent agency - there should be no question of a person losing his or her home. People could make interest-only payments or park the mortgage in order that interest does not accrue while there is a chance to pay down some of the principal. A person in the Defend Our Homes group has paid up to €100,000 in interest alone on his home because he cannot pay his mortgage.

We have all heard the proposal from New Beginning, which is very sensible. It proposes that 35% of net income could be used to pay down debt and that in the early years the principal would be paid down, with the interest being parked. This is a practical proposal. If a family cannot sustain a mortgage, there should be an option for it to be housed by the local authority, although the debt would have to be written off and the bank would have to buy the property.

There is a figure from the Department of Finance of €14 billion to reduce mortgages in line with actual value, but this is nothing compared to the cost of NAMA and the bank bailout. Independent economists question this figure. If the write-down was restricted to the average family home or apartments and buy to let examples and trophy homes were excluded, the figure could be reduced to €7 billion or €8 billion. Some of this has already been built into the recapitalisation of the banks against potential mortgage default.

I will make a point about bankruptcy and personal insolvency laws which should be introduced before Christmas. There should be a Government grouping urgently considering this with a view to introducing legislation before Christmas. There is nothing in the report dealing with sub-prime lenders which do not even need a licence to operate in this country. They work under no regulation and are here to make a quick buck before they pull out. Many are facing eviction because these companies just want to sell a house and get money whatever way they can. They show no concern for families with mortgages.

The debt write-down must form part of the mortgage process. Society must move on. However, we cannot kick the can down the road all the time while playing games with people. This is the biggest issue on doorsteps in the by-election campaign in Dublin West and it is being raised every time. People find themselves in a position where they want the monkey off their bank and although they want to pay off their mortgages, they cannot do so currently. I, therefore, urge the Government to reconsider its position.

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