Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

My party has a duty to hold to account the Government on its handling of the mortgage arrears crisis. A report in this morning's Irish Independent informs us that a new Cabinet sub-committee is being established with additional senior Ministers drafted into it to deal with the mortgage arrears crisis. It paints a picture of distinct unhappiness in Government circles over how the crisis is being handled. The Department of the Taoiseach appears to be frustrated with the Department of Finance. The Department of Finance seems to be frustrated with the Central Bank. The Central Bank seems to be frustrated with the banks and the most frustrated of all are the customers in distress with their mortgages who cannot get a solution identified and put in place. That is the kernel of the problem.

We all need to accept that the only solution to this crisis is for the Central Bank and the Department of Finance to identify a suite of options that can be deployed and then for the banks to put in place a targeted solution for each individual mortgage customer who is in distress. I fully accept there is no silver bullet and the problem will not be solved easily. The only way to solve it is for the banks to get down and dirty, and deal with each file on an individual basis. As is the case with all my colleagues in this House, I am dealing with individual cases of borrowers in mortgage distress and it is utterly frustrating for the people concerned because the banks are not facing up to their responsibilities. Whatever fine words might be uttered in this House, the reality is altogether different.

It is now 18 months since the Keane report was published. That report identified a number of innovative solutions that could be put in place. The record since then of the banks in dealing with mortgage distress is that just 12 split-mortgage arrangements have been put in place in those 18 months. Up to December 2012 only one mortgage-to-rent transaction was completed - we were told a number of others were in the pipeline. The bottom line is that the banks are hoarding their capital and not facing up to the problem, as they should. Customers are not being facilitated in getting a solution to their problems. It is just lingering on with significant damage to the economy and to the lives of the people concerned.

The Minister of State knows the scale of the problem. According to the last official figures, 180,000 residential mortgages were in some form of trouble - either in arrears or had been restructured and had not yet fallen back into arrears. That is almost one in four residential mortgages in distress, which is a national emergency. The Government has undertaken initiatives but they are not working so far. The figures keep on getting worse. Some 44,000 mortgage holders are in arrears of more than a year.

Almost half of them are in arrears of two years or more. In the majority of cases, people will not be able to work their way out of that situation without the bank coming to the table with a solution. That is what I want to see happening. I look forward to the Minister of State's response, which I hope will clarify the role of the new committee and how its work will differ from that of the existing banking and mortgage arrears committee. It is hoped we will soon get some solutions to this problem.

See this speech in context