Joe Costello (Dublin Central, Labour)

I propose to share my time with Deputy Heather Humphreys.

This is one of the more serious issues facing the citizenry. The number of people with mortgages in arrears was published in Central Bank data recently. Some 100,000 mortgages in the State are in arrears or being restructured. By and large, they are single mortgages. This figure refers to residential mortgages, not those of landlords. Including families makes it clear that there are hundreds of thousands in difficulty paying mortgages for one reason or another. The total amount involved has been estimated at €114 billion, based on the value of the properties, but that is a movable feast, given the figures released today that suggest there has been a 60% reduction in the value of property in the last couple of years.

We are dealing with a human tragedy as well as a financial crisis. People are under so much stress all the time, wondering how they will keep the show on the road, their children in school and food on the table. At the same time they must face an increasing mortgage debt burden. The restructuring that has taken place has been reasonably extensive in dealing with moratoria and bank and mortgage lenders. There has been a certain amount of activity in this regard, including by the expert group which provided the original set of recommendations in 2010 and the proposals made by the Government in the current manifesto. To a considerable extent, there have been attempts to implement them.

The nuclear option of debt forgiveness was not recommended by the original expert group in 2010 or in the Keane report in September this year. That group was a model of efficiency in conducting its work in two months and it came up with some interesting proposals. The basic principle which we all want to see implemented is that no one in possession of a mortgage should have the roof taken from over him or her. In other words, they should be able to hold onto the family home. The number of repossessions has been relatively low. Figures for the last quarter show there were 162 repossessions - in 119 of the cases the property was voluntarily surrendered or abandoned. There were 43 forced repossessions. I am dealing with a number of cases in which repossession has been threatened and in which the sheriff has been contacted. If there were only 43 in the last quarter, the number in my constituency seems to proportionately exceed the amount in others. It is a difficult problem in that all efforts have been exhausted, but there is no adequate mechanism in place to deal with it.

The only mechanism offered in the Keane report is that the mortgage be taken over by an approved housing body. A mortgage-to-rent scheme was put in place. However, it has been the subject of much criticism. It effectively means the approved housing body can take over from the local authority and take a 75% stake, with 25% remaining with the lender. The person in possession, the mortgagee, pays the equivalent of a social rent and remains in the house. However, one element is missing, a mechanism whereby the rent paid is viewed as valued capital as happens in local authorities. In a local authority, after ten years, if one is purchasing a house, a figure of 3% is allocated for each year. There should be an opportunity for the mortgagee to repurchase the house, but such a measure is not included in the Keane report. In that way, someone with an unsustainable mortgage, where the mortgage has been taken over by an approved housing association with the agreement of the lender, could remain with his or her family in the home as tenants. This could be done relatively cheaply because the value of property has decreased so much. He or she would, however, would have the opportunity to repurchase when in a position to do so; the equity against the mortgage while paying rent would allow him or her to buy it back. That would be a valuable mechanism for dealing with unsustainable mortgages, a number of which I am dealing with. We need this final safety net to allow people to avoid repossession. We should put it in place as soon as possible.

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