Tom Hayes (Tipperary South, Fine Gael) | Oireachtas source

I am thankful for the opportunity to speak to this complex legislation which deals with repossession. It is important to note from the outset that this Bill attempts to balance the law so that on the one hand, the principal private residence of an individual is protected, while on the other hand the banks' commercial interests can also be maintained. This is not an easy process in the current climate. As a public representative, not a week has gone by where an anxious and stressed constituent has not sat before me in my clinic, pleading for assistance in dealing with many debts and particularly mortgage issues. This is a recurring issue.

Any debate dealing with repossession must outline the current state of affairs in the overall picture. The current rate of repossession in Ireland is much lower than any other European country, according to the Secretary General at the Department of Finance, Mr. John Moran, who recently addressed the Committee of Public Accounts. He indicated that the Republic of Ireland has a repossession rate of just 0.25%, compared to 5% in the US. However, the Central Bank estimates that nearly 95,000 mortgage accounts are in arrears of over 90 days, which equates to nearly 12% of all mortgage accounts. The issue is nearly at breaking point.

Repossessions will always remain a measure of last resort but our current position demands robust, fair and sympathetic legislation that is practical for all parties concerned. This Bill deals with two particular issues striking the balance required between banks and homeowners. There is the issue of Start Mortgages v. Gunne and the provisions for banks to repossess a house are ambiguous for mortgages that started before 2010 and where court action did not start before 2010.

All efforts must be made to ensure a person can retain the principal private residence. That is important as these are the residences in which people raise their families, so they must be protected. With a neighbour who bought a house after 2010 or the local bank who sold the mortgages, there must be a satisfactory conclusion for all parties. If we are to have fair rules or regulations to deal with the unfortunate cases that can occur when repayments become unsustainable, we must ensure that all people will be treated the same and have the same legal entitlements, regardless of when the house was purchased. We should also remember that a commitment to closing this loophole was agreed with the troika in 2010.

We must welcome the aspects of the Bill that will allow the adjournment of certain repossession actions to allow for the possibility that the matter could be resolved by recourse to the Personal Insolvency Act 2012. This will offer hope to distressed mortgage holders facing the awful prospect of losing their home, as another arrangement may be found so that they can remain in a family home. The much-debated alternatives in the Personal Insolvency Act can and will provide an alternative to repossessions with the will and co-operation of all concerned. It would be of benefit to concerned parties to reach an agreement to ensure repossessions of the family home remain a last resort.

It is an ugly truth that there will be more repossessions in Ireland over the next few years. Our current rate of repossessions is not sustainable, given the climate we are in. However, this Bill will bring about a fair and practical way of dealing with an awful position that nobody wants or thinks they will be in. The economy could change and we may be in a better place in the not too distant future. People in trouble with banks and building societies in the 1980s suddenly got out when their houses were worth much more because they had time on their side. Along with the legislation brought before the House, people must be given time to pay and the principal of the loan should be spread over a longer period. We should be considering longer term loans even than the 25-year mortgages. In days gone by, when people were poor in rural Ireland and land was divided and given out, land bonds were offered, with some given up to 40 years to repay loans on land. Those bonds were repaid and in the meantime, sustainable businesses were built.

In this debate that concerns repossessions and home ownership, we should seriously consider longer term loans. When a house is built, it will remain for many years. The standards used, particularly in the last number of years, are very high and the houses will survive for many years. I ask the Minister to consider the issue and comment on it. The banks, in particular, could be asked to provide longer term loans.

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