Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

I thank Deputy Michael McGrath for tabling this motion and publishing the Mortgage Resolution Bill. I also thank him for the work over the past two years on the issue. In these two years the situation has considerably deteriorated and we have seen a relative lack of action on many fronts to deal with the issue. The 94,000 mortgage holders whose residential mortgages are in arrears of more than 90 days look at the effort going into so many other areas of political activity, such as trying to get a deal on debt, the Presidency and the CAP, and see a comparative lack of effort on this issue. The kinds of frustrations we are all seeing in our offices on a daily basis is easy to understand. The lack of an independent solution is a key issue.

Deputy Dooley put his finger on the issue in respect of banks. It is easy to come in and slam the banks for a couple of cheap headlines. Their legal obligations are such that they are not in a position to deal with the level of debt they have and, if they were, they can use that as an excuse. It is one solid legal reason for an independent broker.

Two weeks ago, there was a big press conference with the Minister for Finance, Deputy Noonan, outlining a programme of timescales for offers to be made to people with mortgages. The problem is that the bank gets to make the offer. The bank is still in the driving seat. How will we equip the borrower in terms of an ability to handle the offer? MABS continues to be under-resourced. It cannot deal with any more people. If we are serious, we should resource MABS to the extent that it needs. There are enough experienced financial professionals out there to give other assistance if there was a willingness to do so.

The Minister insisted there would be no forced repossessions but then Mr. Elderfield said there would be. Today, the Taoiseach said no one will be forced to give up her job but the Minister for Transport, Tourism and Sport, Deputy Varadkar, who has a habit for telling it as it is, said people will be forced to give up their jobs. The difficulty is the vacuum of information. Why did someone have the bright idea of leaking the guidelines over the weekend? Someone in government had sight of the guidelines and decided to throw them out in an attempt to project action in the run-in to the by-election. All it has done is scare people. The debate about work and the choice available to those who work in respect of child care costs will be replaced by other issues as the guidelines become clearer. Given the manner in which it has been handled over the past two days, if the guidelines are ready they should be published so we can have an informed discussion about them. At least there would be uniformity in the financial system. One bank looks for one set of information while another bank looks for different information. Any Deputy worth his or her salt is dealing with this issue in the constituencies. We are all engaging with banks on behalf of mortgage holders and commercial loan holders. We know the different approaches of banks. By publishing the guidelines, we can get rid of the fears arising out of the Government misinterpretation of the guidelines and we can allow people to start preparing.

Regarding the announcement two weeks ago, offers will be made and the banks must have offers made to 30% of mortgage holders by the end of June and to 50% by September. However, there is no deadline on settlement of the offers. Much like SME lending, when banks all say they are reaching their target while we know it is not happening, the banks will say they have met the targets and made the requisite number of offers by June and September. However, there will be no pressure on anyone to move the offers from the status of offer to a concluded deal. It comes back to the central point of the argument, that there is no third party, independent broker to decide whether the offer is fair and whether the borrower is dealing appropriately and properly with the bank. That is missing in the Government's approach. Deputy Michael McGrath's Bill presents a resolution.

Who can argue with the proposals of Deputy Michael McGrath? Split mortgages, parking part of the loan for up to ten years, interest only payments, extending mortgage payments, repayment holidays and debt for equity swaps are all practical initiatives that will not pull the ground from under bank recapitalisation. The asset is still in place except it is priced at a more reasonable level.

Many of these have been on the table for some time. One would think the banks only came across the idea of split mortgages last week the way they have suddenly rushed to state they will offer these products. They are available. Surely the Government will not turn its back on a Bill which proposes a solution to the problem faced by so many citizens - the number is 94,000 and rising. We are going to pass the buck to the personal insolvency service which is in its infancy, without giving it any idea of how many will avail of its services. The Minister for Justice and Equality, Deputy Alan Shatter, reckons that it will receive 3,000 bankruptcy applications in its first full year of operation. That is just on the bankruptcy and commercial side alone. We have seen how many have gone overseas in the past few years. What the Minister for Finance, Deputy Michael Noonan, did two weeks ago was to lump the entire mortgage resolution issue on top of the personal insolvency service. Will it be given the resources it needs to manage it? Will the commercial side which was greatly trumpeted and welcomed not be touched while we deal with the mortgage side?

In the early days of any new agency - for example, Student Universal Support Ireland, SUSI; the centralisation of the medical card applications process and so on - it does not cover itself in glory. What we are doing is that instead of giving the personal insolvency agency a chance to get up and running, we are placing the futures of 94,000 families on its shoulders to try to resolve their 90 days plus arrears issue without providing it with extra resources, without a clear timeline within which we expect it to deliver and without bringing in an independent third party to referee and define who is making a proper offer.

Mortgage arrears cause enormous distress and lead to enormous insecurity. They are a major drag on the domestic economy, contributing to unemployment and the collapse of the retail and services sectors. The issue needs to be resolved. As a result of personal distress, the ability to make a judgment call is impaired, as is the ability to deal with matters as one might otherwise do. That is another reason an independent third party should make that rational judgment call on the offer from the bank and the response of the affected mortgageholder. There are so many reasons we need this agency, as prescribed in Deputy Michael McGrath's Bill. There are so many additions it would bring to the equation and so many positives which would assist us in the solving of this problem. It is beyond me why the Government cannot accept it as a practical step.

The personal insolvency legislation still gives the bank a veto. A person's mortgage accounts for some 65% of his or her debt. The banks still have a veto and there is no independence in terms of a bank making an offer. One may not be in a position in terms of resources to respond to that offer and there is no independent body in place. We are under-resourcing the Money Advice and Budgeting Service, MABS, at a time when it needs resources more than ever. There is, therefore, no option available to many of the 94,000 borrowers affected. If they go to the MABS, they must wait because of the level of service provided. I cannot understand why the Government does not take this Bill on board and see it as the practical initiative it is or put forward some alternative in the form of a third party agency which would deal with this issue in a calm and rational way, the legal responsibilities we have given the directors of financial institutions and the moral responsibility we have as a country to resolve this issue and allow the people concerned to live their lives in an organised manner without the pressure and stress of this debt and allow the economy to start to grow again.

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