John Browne (Wexford, Fianna Fail) | Oireachtas source

I welcome the opportunity to say a few words. I had not intended to speak on the motion put forward by Deputy McGrath, but yesterday morning a man and his daughter came into my office in a distressed state. They only owed €27,000 on their home and they have been paying interest only for the last year and they have never missed a payment, but between Friday and yesterday morning they received 15 phone calls from their bank inquiring when they were going to make the full payment on a monthly basis. Yesterday morning at 10 a.m., it was suggested to them that they should sell the house and pay back what they owe to the bank. That seems strange given that they owe only €27,000 and they are meeting the interest only repayments. That shows the harassment that people are suffering from the banks at the moment. Many people like that family are being harassed daily by the banks seeking their full payments. The man in my office yesterday is unemployed and his daughter is in college. He is making every effort to make repayments, even though they are interest only. He should not be subject to the harassment that he is getting from the banks.

That brings us to the discussion we are having tonight. The revised code of conduct on mortgage arrears, published at the end of June, takes away an important protection for borrowers. Taken together with the mortgage arrears resolution targets programme and the Land and Conveyancing Law Reform Bill 2013, it forms part of a consistent pattern of placing ever more power and control in the hands the banks. The complete failure of the banks to put sustainable solutions in place to date can be seen from the fact that there are 144,000 mortgage cases in arrears and they have dealt with very few of them in the past 18 months. The back drop for dealing with the crisis is one of cuts to disposable income, jobless economic recovery, rising variable interest rates, declining property prices, further hits to households in the form of reduced wages, reduced social welfare payments, property tax, a possible water tax which the Minister, Deputy Hogan, has spoken about introducing, and so on. All of these problems are building up for people who have large mortgages and who are in negative equity.

Following various initiatives by the Government and the Central Bank, the balance of power has shifted firmly in favour of the banks and against the distressed mortgage holder. Essential safeguards have not been put in place to counteract the possibility of abuse of the increased contact which banks will be permitted to engage in with distressed borrowers. The new code does not enshrine an entitlement to a minimum level of income for a borrower entering an arrangement with the bank, and there is no requirement that borrowers receive independent legal advice.

Many people come into me with these problems, and I am sure they come to every other Deputy as well.

We refer many of the cases to MABS. While MABS is doing an excellent job, it is understaffed. I try to accompany people as often as possible when they go to discuss their arrears and loans with their banks. Perhaps it is time that MABS or some other organisation is given an oversight role to ensure the borrower is protected at all times. I have heard first-hand stories about how people are treated by the banks. Usually the bank managers at local level do not have a clue about how to deal with mortgage arrears and they are inclined to harass people if they come alone. It is important that they have legal representation or are represented by MABS or another organisation. Bank personnel at local level are not equipped to deal with mortgage problems. They are not properly trained or given the advice they need. More often than not, deals reached at local level are refused by head office in Dublin.

This is an important motion and the Government should accept it. Over the last several months Deputy Michael McGrath has been putting forward a number of useful initiatives. The time has come for the Government to stand up to the banks and stop them from riding roughshod over people in mortgage arrears.

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