Joan Collins (Dublin South Central, People Before Profit Alliance) | Oireachtas source

My colleague will be here shortly.

This debate is important and many points have been made, from one side of the House to the other. There is no doubt that the rate of repossessions has been very low, partly because of the 2009 judgment but also because of negative equity and the banks not wishing to move to repossess because of the effect it might have on their loan books. The banks have already partly been bailed out to the tune of some €64 billion for the loss of equity in homes. The idea that a low level of repossession, or evictions as it would properly be, should be seen as a good thing and preferable for society than to have people lose their homes because they cannot afford their mortgages seems to be a problem for the troika. It has demanded legislation by the end of March in order to close the judgment of 2009.

There have been Ministers and Deputies assuring us that repossessions, evictions of families from their homes, will only be a last resort but there is absolutely no guarantee this will be the case. After this legislation is passed it is inevitable that there will be an increase in evictions, not only in the buy to let area but also including family homes. Some €62 billion of the €142 billion outstanding in mortgages lies with foreign-based banks - Ulster Bank, the Bank of Scotland, RBS, ACC and various sub-prime lenders, all of which have withdrawn from the Irish mortgage market. They are not lending into the market and are more concerned to get what they can and exit. That is it - they will get what they can. I know from my experience in dealing with people in mortgage crisis that these are the most aggressive lenders in terms of resorting to the courts.

If the Government was serious about protecting the family home it would accept that what is required is specific legislation to restructure mortgages for people who are in arrears and struggling with their mortgage for the family home. I have raised this issue a number of times.

I have also tried to have it included in the insolvency legislation. It is well known that specific legislation is needed to deal with mortgage restructuring.

The Bill I prepared is based on the Norwegian model and aims to protect people in their family homes. It is a tried and tested approach that worked effectively in dealing with a mortgage crisis in Norway. As these loans were solely on the family homes, the legislation provided for a right to a suitable family home and only permitted the property to be sold on the basis of sufficient after-loan clearance to purchase a suitable home in the same locality. Payments were based on maintaining a reasonable standard of living, which would be determined by an independent personal insolvency practitioner if voluntary agreement could not be reached between creditor and borrower. Any negative equity was treated as unsecured debt and secured debts were based on the market value of the security of the home plus 10%. The legislation also required that all financial matters be fully and truthfully disclosed.

Members of the Labour Party suggested similar ideas before they were elected to Government only to ignore them afterwards. The Minister for Social Protection, Deputy Burton, argued that the price of a home should be set at market value plus 10%. I cannot understand why these provisions are not being included in the insolvency legislation. The only explanation is that the Government fears that the banks will not accept legislation of this nature.

These measures will mean nothing if people who are struggling to pay the interest on their mortgages are required to pay up to €5,000 to a personal insolvency practitioner. People are right to believe this will be another gravy train for the legal profession. The Government should have established a similar process to that of MABS so that a public entity could help with cases of personal insolvency. Repossessions are inevitable if people cannot afford the services of a personal insolvency practitioner. Even if the Government allows the legal eagles to make large amounts of money, it should also allow people access to a publicly funded personal insolvency agency. MABS should be resourced sufficiently to provide this service because its staff has gained valuable experience in assisting people with debts. It could use its expertise across the board rather than leave it to individual legal professionals to work on a case-by-case basis. This may be why the Government is not allowing MABS to take on this role. It would be useful if the experience gained in specific cases can be used to assist others to find a resolution. As the legislation stands, however, the banks will be able to make the final decision on whether to accept the resolution proposed by a personal insolvency practitioner.

A previous speaker stated that our personal and national debts are painful for people. It is very painful for some people but I recently spoke to an individual who was invited to a dinner at which two bottles of wine worth €95 each were served. Somebody in this country can still afford to splash out €95 on a bottle of wine. That is a social welfare payment. There is plenty of money in this country but the pain has been put on the shoulders of ordinary people who are struggling to pay their mortgages and stay in their homes. They want to be debt free in order to be able to spend money again on our high streets. Unless we introduce specific legislation on the family home and lifting the burden, the issue of repossession will not go away. If attempts are made to repossess ordinary family homes, people like me will defend the occupants. It will become a big issue in this country.

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