Denis Naughten (Roscommon-South Leitrim, Independent) | Oireachtas source

I welcome the opportunity to contribute on this important legislation, which has significant implications for families and society as a whole. We know the Bill's background, which is an anomaly in the enactment of the 2009 Act that has stalled repossessions by banks. The Bill has provided us with a window of opportunity to put the mortgage debt situation back on an even keel. While I welcome the fact that the Personal Insolvency Act was a significant step in the right direction, the main difficulty with it is that the banks still hold all the cards. This has been quite frustrating, as the banks have final refusal on proposals. In this respect, the anomaly in the 2009 Act has provided some balance for the mortgage holder, but it could be removed on foot of this amending legislation.

We have been given assurances that repossessions will mainly be of investment properties rather than family homes.

There is no doubt that is the Government's intention with the legislation. The difficulty is that the banks have a completely different agenda. Their agenda is very much focused on profitability. We can see the attitude the banks are taking currently with variable mortgage interest rates. When the European Central Bank reduces interest rates, the commercial banks in this country increase them. They have no intention of trying to assist the economy or struggling home owners. I do not believe they have any intention of facilitating them following the passage of the Bill.

It is important to remember that other statutory mechanisms exist for the banks to gain possession of a property other than what is proposed in the amendment. For example, a court order could be secured for possession of the mortgaged property followed by the sale of the property by the mortgagee out of court. Foreclosure could also be chosen as an option or a receiver could be appointed. The difficulty is that such mechanisms are not as easily accessible from a bank's point of view or as cheap for the banks to enforce. Banks always go for the soft option. They should not be given a soft option because they facilitated the irresponsible lending that took place. There is no doubt people took out loans they should not have taken out, especially those who bought investment properties. They were hounded and pursued by banks who threw money at them and encouraged them to take out irresponsible loans, yet to date the banks in this country have got away scot free. The people who gained significant bonuses on foot of selling those particular mortgages in the first place went on to get significant lump sums and bonuses when they retired from the banks. They have been rewarded, and will continue to be rewarded, for irresponsible banking, and we, as taxpayers, are picking up the bill in that regard.

Sadly, many home owners who are struggling to make ends meet are the ones that are bearing the brunt of it. Not only do they have to pay for the austerity we all face and try to balance the books at the end of the month, but they are also in serious financial difficulty with the banks and face the prospect of repossession. It is important the banks take some of the responsibility for the situation. They have taken no responsibility to date and have not even acknowledged that they bear some responsibility for the lending that took place.

In some cases, banks were so anxious to offer mortgages that the title is a mess. There are situations where the house is owned by one bank through the mortgage taken out on it while the site on which the house is built is held by another lending institution and the paperwork has never been resolved. In other cases, developers built houses on land that was held in bond by local ,authorities and banks were willing to give out mortgages in spite of the situation arising whereby the site has one particular lien on it and the house itself has another lien. The banks did not seem to have any difficulty in that regard but it will cause huge problems for the home owners involved.

The fear is that repossession is the stick that will be used to break the back of many families who are in distressed mortgages at present. However, I accept that there is a valid argument for repossession in the case of a person who refuses to engage with the banks. There is difficulty repossessing properties in developer-built estates and having the developments completed and the properties sold off. Sadly, in my constituency, we have semi-derelict estates and ghost estates where only a small number of people, unfortunately, bought houses. Unbelievable vandalism and anti-social behaviour is taking place in such estates. Families are caught in such situations where they got a mortgage to buy a house. They paid well over the odds and are now stuck there with significant negative equity. At least if the bank could get clean title and have the estate completed and the properties sold off at a marginal price, one would have owner-occupiers in those properties. I have heard of cases where houses have been torched and burned to the ground due to vandalism in estates. There is a danger that a vacant semi-detached house could be set on fire and the home next door could go on fire as well. I accept there is a need to have a swift mechanism to deal with those issues.

It is important to strike a balance. The proposals that have been put forward by free legal advice centres, FLAC, are to be commended. They restore some of the balance towards home owners. FLAC made the point that there should be an amendment to the legislation to ensure the Central Bank’s code of conduct on mortgage arrears is applied fully by the banks. Where that does not happen, the court would have the jurisdiction to refuse the application by the bank for repossession. More discretion must be given to the courts in such circumstances to bring some balance into the situation for families. FLAC has set out six key points that would help to bring some balance to the proposals before us. I hope the Minister will take on board on Committee Stage the proposals made by FLAC. They provide the type of balance that is required and ensure that while the loophole in the legislation is addressed, the law protects those with distressed mortgages who are in family homes and at least gives them some power and leverage over the banks.

Previous speakers referred to the cuts to the money advice and budgeting service, MABS. I am disappointed with the cuts because MABS provides an extremely valuable support for families. More must be done to resource the money advice and budgeting service properly rather than cutting back on it. It would make sense for MABS to work with RTE to produce a series showing people how to better manage their finances. The difficulty is that when growing up, my peers did not see the same need and shortage of money as previous generations. Those in their late 40s, 50s and 60s have the skill of managing money, unlike those who grew up during the 1990s and the 2000s who had access to cheap money and plenty of credit.

Even the basic skill of managing money can be difficult for people, and something along those lines would be extremely helpful in assisting families. I am not necessarily referring to families who need to access MABS now but families who, if they are helped now, can avoid having to access that service in the future. I hope that something along those lines can be considered as part of a public education campaign. RTE, as the public service broadcaster in this country, should examine the possibility of running such a series. A similar series was run in the past with Mr. Eddie Hobbs, and a new series along those lines would be of immense benefit to families who are struggling to make ends meet.

I wish to raise a number of other issues with the Minister for Justice and Equality which relate directly to land transactions and the Property Registration Authority. The first is an anomaly has come to my attention in the context of dealings I have had with the lands division in Cavan, which is the replacement for the Land Commission. The division is doing a tremendous job, with very limited resources, in trying to work out all of the remaining title issues regarding lands that were originally acquired through the Land Commission over many years. I am aware of a proposed project to develop a public walkway through Tarmon bog outside Castlerea, County Roscommon. A community group has come together there to seek funding through the Leader programme to develop this as a public amenity, but the lands are in the control of the Department of Agriculture, Food and the Marine through the lands division in Cavan. The administrators of the Leader programme and the Department both believe this is a very worthwhile project but, at the final hurdle, the group faced a difficulty because there is no statutory right given to either the Department or the Minister to grant permission to the community group to use the lands owned by the Department. Those lands were originally owned by the Land Commission. The disposal of the lands can only be governed by section 8 of the Irish Land Commission (Dissolution) Act of 1992, which did not make provision to allow community groups to access lands for the development of amenities such as that proposed for Tarmon bog.

A change must be made to the existing primary legislation to facilitate the transfer of those lands. In that way, some of these lands can be used as public amenities and as assets to draw tourists into areas where tourism footfall has been low to date. As we know, walking and cycling tourism is growing rapidly internationally and is a tourism segment that we can capitalise on here because it is not weather dependent. I ask the Minister to speak to staff in the PRA and the lands division of the Department of Agriculture, Food and the Marine to see if a solution can be found to facilitate community groups such as the one in Tarmon, County Roscommon. Perhaps some mechanism can be found whereby another arm of the State could take over the ownership and management of the lands and then allow the community group to develop the public access project. Historically, funding has been available for such projects through Leader companies but that funding has now dried up because the current Leader funding stream is coming to an end. However, new Leader programmes will be up and running again in two years, which provides a window of opportunity for us to resolve the legal issues relating to this project.

It is important to point out that such issues do not just affect this particular project in Roscommon. The same problem will arise in the future with many of the bogs that have been designated by the National Parks and Wildlife Service, NPWS. The intention is to provide public access to many bogs which are of huge scientific interest, but this particular problem will arise again because the majority of the title for those bogs is still held by the lands division, the successor to the Land Commission.

I wish to refer to the decentralisation of the PRA to Roscommon town. As the Minister knows, a new state-of-the-art building was provided, at a significant cost to the taxpayer, to accommodate 230 staff. That building currently houses 80 PRA staff and 50 staff from the Department of Agriculture, Food and the Marine. The lease has expired on the Setanta Centre in Dublin, which houses PRA staff. Plans are also afoot to amalgamate the PRA with Ordnance Survey Ireland and the Valuation Office. In that context, it would make sense to decentralise some of the staff to the PRA offices in Roscommon town which were purpose built for the PRA rather than entering into new leases for offices. The PRA office in the town has a very useful public office and I must commend the staff there who provide an invaluable service to those who do not have the wherewithal to access information online, because not everyone is up to speed with technology or has the computer literacy required. I urge the Minister to consider streamlining that particular decentralisation, now that he is amalgamating the Valuation Office, the Ordnance Survey and the PRA. Even in the west, the Ordnance Survey is leasing two offices, one in Sligo and the other in Tuam. I contend that it would make sense, given that the State already owns the property in Roscommon town and is planning to amalgamate three bodies, to relocate the staff to that premises.

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