Finian McGrath (Dublin North Central, Independent) | Oireachtas source

I welcome the opportunity to speak to this legislation as it gives the House an opportunity to have a broad debate on mortgages and repossessions. Having listened to previous speakers, it is clear that Deputies have strong views on borrowing, repossessions, mortgages and the provisions of the Bill. Many of us are angry that the banks and their senior managers who helped wreck the country are putting pressure on the Government to hammer home owners and demanding more repossessions. I am galled that they have such a brass neck. My job, as an Independent Deputy, is to stand up for families with mortgages by challenging the banks that are hammering householders.

As previous contributions have demonstrated, there is cross-party support for the excellent work done by the Money Advice and Budgeting Service. The advice, assistance and support provided by MABS are an example of public service at its best. Many Deputies will have had a positive experience of using the service on behalf of constituents.

The Bill provides that certain statutory provisions in respect of repossessions will apply to mortgages created prior to 1 December 2009, the commencement date of the Land and Conveyancing Law Reform Act 2009, notwithstanding the repeal and amendment of these statutory provisions by the 2009 Act.

Subsequent case law highlighted the unintended consequences of this repeal in the context of the repossession rights of lenders. The Bill also provides for the adjournment of certain repossession actions where a matter can be resolved by recourse to the Personal Insolvency Act 2012. I will return to that matter later.

I take this opportunity to praise and commend a small group that is very involved in protesting about this and other issues relating to debt and the banks. I refer to the Ballyhea protest group, which is a little thorn in the side of the establishment. The members of this group live in Ballyhea, which is near Charleville, County Cork, and they have highlighted the issue of our debt for the past number of years. There is a major imbalance in Ireland's contribution to the current Europe-wide crisis. To correct that imbalance, and after consultation with several experts in the field, the Ballyhea group is trying to meet officials from the ECB and the European Union. The group in question is doing us a great service because it is highlighting this issue, which is directly linked to the legislation before the House. The group is asking the ECB to write off the €28.1 billion in sovereign bonds currently held by our Central Bank in lieu of the promissory notes - €25 billion and €3.1 billion for 2012 - which were issued in 2010 to cover a flagrant abuse of the emergency liquidity assistance fund when €31 billion was pumped into two already insolvent institutions, namely, the former Anglo Irish Bank and Irish Nationwide Building Society. This was an abuse which the ECB approved. The group is also seeking that the EU - through the ESM - restore to the Irish Exchequer the €3.1 billion already destroyed on the basis of those promissory notes, the €20.7 billion taken from the National Pensions Reserve Fund to bail out the banks to which I refer and the remaining €13 billion or so borrowed from the various emergency funds to bail out the Irish banks in general. The first proposal in this regard would ease the long-term bank debt burden and the second would ease the current situation, provide money to be invested in job creation and enable us grow our way out of the recession. All of this is linked to the debate on this legislation and that which relates to mortgages, repossessions, etc.

The Land Conveyancing Law Reform Act 2009 is a major instrument designed to reform many areas of land law, including ownership, trusts, co-ownership, conveyances and, relevant to the current Bill, mortgages. The purpose of doing so was to simplify existing land law, which had been developed over centuries, and facilitate the introduction of e-conveyancing. It is important to consider the position with regard to existing law and examine the details relating thereto. I referred earlier to MABS and I commend that organisation on the work it does to assist people who are at risk and provide them with sensible economic and personal financial advice.

I agree with those of my colleagues who referred to the group of fat cats within society whose members have money and resources but refuse to pay. I do not include these individuals in any sympathy or understanding I may wish to convey. It is they whom we should not be afraid to pursue. I accept that there are many people who are trying to pull the wool over the eyes of others. That is a matter about which we must be sensible. We must also be sensible with regard to what happened in the banks in the past. When I refer to the banks, I am not talking about the low-paid workers or ordinary staff who are now getting grief from customers, etc., with regard to the actions of very senior officials. I am, rather, referring to the fat cats at the highest levels within the banks who brought this country to ruin and who conned and misled politicians and the people. That point is not often made in the House but it is an extremely important one. The fat cats to whom I refer also lied to all and sundry. It is vital to make that point because the message in this regard does not appear to have been put across as yet. Many people were blatantly misled.

In discussing this issue, we appear to be afraid to question what is happening in the EU and the ECB. There appears to be something of an inferiority complex among many people in Ireland. If mainstream politicians do not ask questions in respect of the matters to which I refer, more extremist right-wing groups such as those which have emerged in the UK - I refer here to UKIP - and elsewhere in Europe will exploit the situation. There is a need to monitor what is happening within the European Union and the ECB and we must not be afraid to discuss the euro, which is the elephant in the room for many people. We must not be afraid to discuss what happened and ask whether we made a cock-up and whether certain individuals did not do their jobs. I am of the view that the latter is what happened. There is no point in beating around the bush.

In January 1999 the EU launched its new currency, the euro, which carried within it the seeds of its own destruction, including those flaws highlighted in an article which appeared in theFinancial Timesa year prior to the launch. The dangers had, therefore, been pointed out. There was a lack of foresight with regard to what might happen when countries and their banks suddenly found themselves with access to an unlimited supply of previously expensive billions. What was done was not thought out. In addition, there was a lack of oversight and no one applied the brakes in respect of the destructive and reckless rush of capital from the core to the periphery. Finally, there was an absence of any structure to help the Union cope in the event of an emergency. Within eight years the euro crashed, taking with it an entire array of banks and causing devastation in the economies of several eurozone countries. One of the major causes of the systemic imbalances built up during the period 2000 to 2007 across the eurozone was the monetary policy mismatch. This is not my thesis but rather that of Dr. Constantin Gurdgiev. I am not stating that Dr. Gurdgiev is correct in everything he says but I am of the view that there is a need to ask questions at European level. The Government must up its game in that regard and take a more proactive approach.

Everyone accepts that there is a need to share responsibility. However, we must ask if Europe is prepared to share the burden. It seems to be the accepted approach within the Government that these matters must be dealt with behind closed doors. When the Government does something good - I refer, for example, to deals on the promissory notes or stretching out the terms of repayment - then I will wish it luck because it is acting on behalf of the Irish people in this regard. Such developments are not party-political issues; they are in the national interest. I, as an Independent Deputy, will back anyone in government who does something that is good for the country, regardless of who he or she may be. If those in government fail in their duty in this regard, then I will act as the watchdog. Those of us in what is now known as the eurozone who signed up to the new currency, with all its design flaws, share responsibility for the chaos it has caused. We must also share the cost. In that regard, I refer to the various financial institutions in this country that engaged in reckless lending. Ireland has been burdened with a massively disproportionate share of the cost to which I refer. What is that share? To date, and excluding the contribution from NAMA - which was established to take over the major bad debts of the Irish banks - the bailout has cost €64 billion. When broken down, this represents a cost of €14,244 per person or €60,000 per family. That is the reality. It is important to highlight this fact because it has a bearing on the legislation before the House in the context of people's mortgages, insolvency issues, etc.

When the financial crisis hit Europe, Ireland was first in the firing line. Lacking any guidelines or structures from Europe or any supervisory oversight, the then Government took unilateral action to save the banking system and introduced the infamous blanket guarantee of September 2008. Having considered the matter in hindsight, many are of the view that this course of action was ill-advised in every sense. All of the advice provided on that fateful night in September 2008 - and the subsequent decision to introduce the guarantee - was based on misinformation. I was a Member of the House at that time and I am aware that a great deal of misinformation was spread. Despite what it now states, the Labour Party was going to support the bank guarantee and it had only minor reservations in respect of it. Those in the Labour Party have been saying for two and a half years that they did not support the guarantee in September 2008. However, they subsequently gave their support to it, so they should get off the pitch and stop trying to con people in respect of that matter. The bank guarantee was, as already stated, ill-advised and there was a serious amount of misinformation relating to what was happening at the time. That is a matter to which consideration must be given. I would welcome any discussion relating to the causes of the banking crisis in order that we might learn lessons. I am aware that its fan club in this House will not like me saying so but the European Union was not on its game in respect of the financial crisis and neither were our regulatory authorities. We should not be afraid to make this important point.

As a result of everything that has happened and in the context of the legislation before us, families are being hammered with repossessions and so on. In addition, the provision of services is being affected and people are suffering and taking major hits.

Yesterday, Deputies held a cross-party meeting on the cost of resource hours for people with Down's syndrome. I recommended that we avoid asking the Government for extra money for services without devising cost proposals. The cost would be approximately €700,000 or €800,000 per year. We will be off next week. We should not need to do this. A group of 30 or 35 children with a major disability will be starting school next September. They should receive resource hours. Give them four hours and 15 minutes every week. I am making this point because it is relevant to the economic debate. The kitty is empty because of other people's actions.

Reverting to the issue of mortgages, enforcement is important. A mortgagee may seek to reinforce his or her security by methods other than repossession - for example, a court order for possession of the mortgaged property followed by the sale of that property out of court, sale of the property through the court's intervention, a court order for the sale of the mortgaged property, taking possession of the property and acquiring rents and profits from it, appointment of a receiver, or foreclosure on the property. However, it has been noted that these methods may be more costly and time-consuming for all parties involved due to the procedural requirements. As a result, summary proceedings are deemed to be more efficient. It has also been noted that prolonged and costly procedures to seize mortgage collateral tend to be associated with slower recovery in property markets. This is the current situation.

Mortgage arrears remain a problem and present significant difficulties for banks and the wider economic recovery. I have been naive for a number of months. When people attended my constituency clinic with problems, I told them to discuss the matter with their bank managers and that I would write letters in support. I believed that the deals reached were great, as the payments had been spread out and reduced. What I did not realise was that, under the law, the banks had no other option but to do deals. It is important that the banks sit down with people and help them. I have encountered a number of examples of good practice. I have met only a couple of chancers who were trying to pull a stroke and get out of their mortgages. The majority of people attending my clinics want to make their repayments and are willing to take a hit for a couple of years until they are out of this crisis and have their acts together again. I was pleasantly surprised, as I had expected a higher percentage of people to try to use the process to get out of their mortgages.

The priority on which we must focus is the family home. Last week, I encountered a case of repossession in the northern end of my constituency. There was a row, the family ended up out on the street, and they are now trying to access the housing list and obtain rent supplement. The cycle will start again.

Under this legislation, bankers and the Government should try to keep away from the serious players and instead attempt to reach a negotiated settlement. The majority of people want to pay. Even if it is only €60 or €80 per month, it is still a contribution to the economy.

This Bill is being introduced to address a loophole in the law on summary repossession and is a part of the Government's roadmap for addressing the mortgage arrears crisis. A commitment is also contained in the revised memorandum of understanding between Ireland and the troika to introduce legislation remedying the issues identified by case law in the Land and Conveyancing Law Reform Act 2009, those being the unintended constraints on banks in realising the value of loan collateral in certain circumstances.

We need common sense and balance. During the good times, we had neither. Nor did we have sensible supervision or regulation. Despite this, some people are returning to the pitch and claiming that we need light-touch regulation if we are not to damage the financial services sector. We need sensible and clear-cut regulation. When I worked in a north inner city school, the Department's inspector supervised us. If I was £300 over budget, my local inspector told me to watch my finances. We then stayed within budget. If we came up short, we ran a fund-raiser to make up the balance. We need the same type of housekeeping found in people's homes, not the rampant light-touch regulation that has destroyed the country. The Minister will not like me pointing this out, but it has been highlighted by the left for the past 20 years. Various Governments turned a blind eye and got carried away with their rock 'n' roll, parties and so on.

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