Alan Farrell (Dublin North, Fine Gael) | Oireachtas source

No one in this House is under any illusion about the absolute necessity to introduce this Bill on the basis that we have to allow banks to be banks, to lend money for mortgage purposes and for that money to be repaid over a period of time. I do not think any mortgage holder is under any illusion that is the purpose of taking out a mortgage, with the eventual aim of owning one's own home after a period of years. The issue we are dealing with here is the consequence of the Start Mortgages v. Gunn case in 2011, in which we were dealt a blow when it comes to the repossession of properties with unsustainable mortgages or where individuals were unable to repay their debt. There was simply no recourse available to the home owner or the bank.

Equally, no one is under any illusion that the repossession of the family home, or any other property, is the last resort, although there are many anecdotal debates at the moment about individuals who choose not to pay their mortgages. The clear evidence in the number of repossessions that have taken place in the last 24 months versus comparable markets globally demonstrates that something is wrong and must be corrected. This is a very sensitive issue, particularly when it is a family home.

Deputy Donnelly referred to the repossession of a buy to let property, which leads to the loss of a family home as a result of a family's level of debt as perverse. I do not find it perverse. I am aware of huge numbers of people who bought multiple buy to let properties based on collateral, their own financial ability and the availability of cheap credit. We are dealing with the legacy of that as a nation. Much larger property and speculative deals led to the hundreds of billions of euro of debt this State is in but it all adds up.

The function of the bank is to lend money with a certain element of collateral to ensure it is covered if the debtor defaults. It would be ridiculous if a bank was to lend money and there was no collateral and it had no recourse if the debtor simply stopped paying.

The Government has put in place a number of approaches to deal with this issue, not least of which is the setting of targets for the bank to deal with the 90,000 people who are more than 90 days in arrears at present. They must be dealt with sympathetically to see if there is a sustainable way in which their mortgage could be spread out over an additional period, if there might be some equity in the property, if a mortgage to rent scheme would suit, or if personal insolvency is the right solution for that debtor.

Comments were made lately about the FLAC observations on the code of conduct and the need to ensure both the debtor and lender have complied with it, to protect further and compel banks to adhere to the arrangements. The tabling of repossession or debt resolution orders at the Circuit Court instead of the High Court would also reduce the overall cost of the process. Frankly, those are reasonable requests.

For those who find themselves in mortgage arrears and beyond the point where they can sustain the debt, whether they be unemployed or trying to pay enormous mortgages without any real hope of doing so over the term of that mortgage, and who wish to restructure their debt, the Government has provided all of the necessary tools to deal with the mortgage problems. Putting in place a reasonable repossession arrangement for the Irish banks is essentially about protecting taxpayers from the need to invest further in banks on the part of the State. It is equally for the banks to succeed and ensure they become profitable so the taxpayers' liability is removed.

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