Pádraig Mac Lochlainn (Donegal North East, Sinn Fein) | Oireachtas source

Prior to speaking about the specifics of the Land and Conveyancing Law Reform Bill placed before us today, I wish to outline yet again to the House the reality of mortgage difficulty. I am not convinced that the Government grasps just how dire the situation is for tens of thousands of households across the State. As I speak, almost one in four households is in mortgage distress. That is more than 180,000 households, which is a huge number. It is important to remember that this is not just a number or a statistic. These are real people, most with real families to take care of. That means hundreds of thousands of citizens - men, women and children - feel the impact of mortgage distress. Since the Government came to power, the number in arrears has almost doubled, just like it did in the last 18 months of Fianna Fail’s tenure.

As we witness an increasing number of people fall into mortgage arrears, we also witness a change in the demographics of those who are in mortgage arrears. We are seeing people from all walks of life struggling to keep up with their mortgage repayments, not just those at the very bottom of the ladder. It is not just younger people who bought during the boom. We are now seeing more middle-aged and elderly people in mortgage distress. A report by the money advice and budgeting service, MABS, published just two weeks ago found that clients in mortgage difficulty are primarily households with children, located in urban areas and headed up by people between the ages of 45 and 65. These are all families who put their faith in politicians, economists and the great and the good. Let us not forget the newspapers, radios and TV channels with their property supplements and programmes which fed the message that we all needed to get our foot on that ladder and to do it now before prices increased further. That was the environment and the culture that fed this mess we now have to untangle as a people.

I listened to reports from the Garda Representative Association’s annual conference yesterday and the stories of many rank and file gardaí who are no longer able to pay their mortgages. The people who are at the front line of protecting the citizens of this State can in some instances no longer pay their mortgages. That is what Ireland has become in 2013. It is a shame the Minister was not present to hear the stories. I hope the relationship will build again in the near future. One could ask what we do to resolve the situation. Let us examine the action that has been taken. We look after the banks, yet again, and make it easier for them to repossess family homes. We are now, as a modern society, putting people out of their family homes in order to help the banks, as if we had not done enough for the banks.

The Fine Gael and Labour Government is turning its back on people, while supporting bankers at State-supported banks to pay themselves grotesque salaries. Before I speak to the details of the legislation, it is important to put it in the context of the soon-to-be up and running Insolvency Service of Ireland, ISI. My party and I have a number of problems with the system. First is the bank veto, which means that people who are struggling with high debts are effectively barred from entering the insolvency process if their bank, which accounts for most of people's debts, disapproves of it. With so many people struggling under the weight of unsustainable mortgage debt, there is an onus on us to come up with a response to the crisis which does not put banks in control. It is not the right response for banks to be in control and to have a veto. Remarkably, in today’s Ireland the banks still rule. We paid the price to bail them out and yet they are just not stepping up to the mark to resolve the crisis, one they had more than a hand in creating. Sinn Féin has called for an independent body that would force banks to accept reasonable arrangements on a case-by-case basis. That could include write-downs in some instances. It is important to remember that write-downs must be part of the solution in some cases.

We also have concerns about the role of personal insolvency practitioners, PIPs. There are genuine concerns that the private sector route that has been chosen will mean that many personal insolvency practitioners will cherry-pick cases with greater opportunities to make money, which means that those who are in the greatest need will not be able to get access to a PIP. Sinn Féin has long advocated for a public insolvency service. I fail to understand why the Minister did not consider making MABS the practitioners, and resourcing it accordingly. It has respected mediators of long standing and it has contacts throughout the State. The service would be well placed to deal with the issue.

I wish to reiterate a point that has been made many times previously. The rushing of the personal insolvency legislation through both of these Houses with inadequate time for a more thorough examination of the Bill was wrong. Given the scale of the crisis, the fact that it is getting worse, and the major flaws in the personal insolvency system, now is not the time to make it easier for the banks to evict people from their homes. The biggest problem with the Bill before us is that it will result in an increased number of people being put out of their family homes. However, that is not the only thing that this legislation will do. It is important to bear in mind all that goes with the family home being repossessed. I refer to the stress, strain and anxiety it places on people, relationships, the impact on children who live in such homes and the huge negative effect on families. That cannot and should not be underestimated. The Bill has the potential to break up families and to ruin people’s lives.

Another important point relates to the large number of mortgages which are with sub-prime lenders who are no longer operating in the State. Certain banks, such as Bank of Scotland, have left this country and just want to cash in. There is no incentive and nothing in the Bill that would force them to make sustainable arrangements. Section 2 of the Bill allows the court, either by its own motion, or on application by a relevant person, to adjourn repossession proceedings for a maximum period of two months to allow for the consideration of the making of a proposal for a personal insolvency arrangement.

What will this mean in reality? Why two months? Why not four or six months, to give real time for people to put in place a plan B? Two months is no consolation to someone who is about to lose his or her home and may eventually do so. Sinn Féin will continue to argue that a different approach is needed. We would make protection of the family home the priority and establish an independent body to force banks into pursuing reasonable arrangements. Sinn Féin is opposed to this Bill as it stands and will not be voting for it. One thing we can agree on is that relying on a loophole in the law is never a good way to do business. However, in the current crisis, this loophole has been a relief for many. My party agrees, as do I, that a loophole in the law is not acceptable moving forward, but until such time as the necessary safeguards are put in place, we should not close it. As long as the banks have the final say, as per the Personal Insolvency Act, and as long as this Government does not force the banks to deal reasonably with people who are doing their best to pay their mortgage, then we will not support this Bill which will make it easier for banks to repossess the family home.

We are particularly concerned about the bank veto and the fact that there is no incentive to engage with the personal insolvency process in a fair and reasonable manner prior to seeking repossession. We believe that the code of conduct is skewed against the mortgage holder and that there are insufficient protections for families who are in the most distress. We are also concerned about the fact that there is not sufficient scope in this Bill for judges to assess whether the banks are being reasonable in their assessment of cases. I intend to table amendments on a number of these issues, to be discussed on Committee Stage in what I hope will be a reasonable manner. I want to amend this Bill to make it a solution and not part of the problem.

See this speech in context