Barry Cowen (Laois-Offaly, Fianna Fail) | Oireachtas source

There is no doubt mortgage distress and the lack of social housing are some of the most pressing issues facing the State today. One could argue the debate on renegotiating the Croke Park agreement also revolves around these issues. Many front-line workers were afforded mortgages on the basis of their pay and allowances. We hope their pay will not be disproportionately affected by any proposals emanating from the Government. Many of these people are no longer able to afford the mortgages they have, but they do not hear any real solutions from the Government.

They do hear about the continuation of the property tax, further cuts to the children's allowance, prolonged delays in allocating medical cards and education grants, and they face water charges that have still not been made fit for practice. Prior to the election, the public had been assured of a softer, easier way with the immediate overhauling of the promissory note deal and retrospective capitalisation of our banks.

It was said that the Government's choices and decisions would be more progressive, yet they have been regressive. While the promissory note deal, as Eamon Dunphy might say, could be described as a good deal but not a great deal, it affords an opportunity and a new start, as well as the potential for some social dividend. Even at this late stage, it could start by addressing concrete issues which in turn address the mortgage crisis, rather than having more rhetoric, Cabinet sub-committees or talk of special focus. To date, we have seen no definitive action in the area of split mortgage schemes but we have seen the decimation of mortgage interest relief.

The Personal Insovlency Act provides that financial institutions may exercise a veto in terms of resolutions. Whether devised in conjunction with and negotiated by an independent assessment, the veto still remains and is retained by the bank.

Last week, I tabled a question to the Minister concerning the failure to adequately promote or implement the mortgage-to-let scheme. Taking both residential and buy-to-let mortgages as of September last year, 167,000 mortgage accounts were in arrears out of a total of 911,000. A further 51,000 have been restructured, so 23% of all mortgages are not being paid in accordance with their original terms. This is both a social and economic crisis.

The data show how little progress has been made in dealing with the mortgage crisis. The Personal Insolvency Bill is untested and it is difficult to predict whether or not it will be of benefit to homeowners, given the veto the banks have over any proposed settlement.

The fact that 20,000 residential mortgages are in arrears of over two years is a shocking indictment of the Government's response to date. There appears to be little or no prospect of these mortgages ever being repaid in line with their original terms.

Despite last week's news on the promissory note, the banks are still reliant on the State for funding and will not get outside investors to invest unless the mortgage crisis begins to resolve itself. At that point, the recapitalised banks may be able to lend with relatively clean balance sheets, and the issues around credit for businesses and households may resolve themselves.

The buy-to-let sector represents a time-bomb for the economy. Some 17.9% of buy-to-let accounts were in arrears of more than 90 days at the end of September 2012.

As regards the mortgage-to-rent scheme and in response to the question I put to the Minister of State, Deputy Jan O'Sullivan last week, eight months on from the launch of the scheme, just eight homes have gone through the mortgage-to-rent scheme service. Only two of those transactions have been completed so far and this is from an initial 708 applications. The ongoing failure of the scheme exposes the Government's complete inadequacy in tackling the mortgage crisis. The scheme has even been the subject of judicial criticism for giving false hope to struggling homeowners.

The Minister of State, Deputy Jan O'Sullivan, said the scheme would help more than 100 families in 2012 and could eventually be geared up to help several thousand. She and her officials emphasised the humane aspect of the scheme in that families do not have to leave their homes. However, the prediction of 100 families being helped in 2012 is in tatters, as is the claim that the scheme could be geared up to help several thousand. The Government needs to answer questions on the failure of the scheme, as well as providing reasons for what has happened.

Of the 708 applications, some 300 were ruled out immediately. I understand that a three-month period must elapse before any such deal can emanate. In addition, it has succeeded in only two cases since last June. As I said earlier, there are no specifics regarding split mortgages, the veto remains with banks, and mortgage interest relief has been decimated. That does not bode well for dealing with this crisis.

By virtue of the social dividend that is supposed to emanate from last week's deal, can we expect progress in this matter in future? The Government has cut spending on social housing by 19% to €585 million, thus leaving local authorities' housing sectors desperately underfunded. This has resulted in close to 100,000 households on waiting lists for local authority housing across the State.

Meanwhile, NAMA has advised that it has identified roughly 3,900 residential properties controlled by its debtors and receivers as being available for social housing provision. To date, demand has been confirmed by local authorities for over 1,500 of the properties that NAMA has made available. Another 800 properties are being evaluated, bringing the overall total that may be deemed suitable to slightly over 2,300.

NAMA is mandated to provide a social dividend, yet only 203 units have so far been provided for housing. This is despite the fact that the Minister, Deputy Hogan, spoke about 2,000 homes being provided in 2012 for people on social housing waiting lists. Let us be generous and say that 50% or 100 units have been provided, allied with the two cases mentioned in the mortgage-to-rent scheme. That is the sort of success that has been achieved in this area.

Where are the 1,800 plus houses that have been promised by the Government from NAMA's property portfolio but which have yet to be delivered? NAMA has made the properties available, local authorities have identified them but the Government has not acted.

The Government has failed to confront the immense scale of the mortgage crisis facing the country. Promissory note deals will mean nothing to ordinary home owners if the financially devastating impact of the mortgage arrears crisis is allowed to rage on. The disaster of the mortgage-to-let scheme exposes the ineffectual response of the Government to date.

While social housing waiting lists have ossified with the failure to utilise NAMA properties, it is now time for the Government - even at this late stage - to get to grips with what is a spiralling crisis.

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