Ciarán Lynch (Cork South Central, Labour) | Oireachtas source

I wrote about it. The Deputy and I were both writing for Douglas Weekly at the time, but we had different things to say. The market was bust; there was no doubt about it. The craziest aspect of the whole situation is that mortgages worth ten times people's incomes were being given out, with repayment periods of 30 to 35 years. It was nothing but a Ponzi scheme, which was sustained by the Government simply because the money coming in was feeding the interests they wished to serve.

The question we must ask ourselves in attempting to deal with the mortgage crisis is what precisely we wish to achieve. In talking of recovery do we mean a return to housing inflation of 8% to 10%, or are we talking about a realistic inflation level of 2.5% to 3% per annum? A sustainable market that is designed to prefer home owners over investors and which sees property as a home, not a commodity, is what can properly be described as a normalised housing market. We did not have such a market during that time. On the other hand, the measures the Government has taken since coming to office have begun the normalisation process.

The Fianna Fáil motion suggests the Dunne judgment should continue to hold and that a mortgage cannot be dealt with if it falls into default or where there is a belligerent lender. That is nonsense. The mortgage market cannot be normalised if banks do not have security on the loans they give out, as per normal lending practice. If lenders cannot make a call on the security on a loan, the whole system is complete and utter nonsense.

The motion's reference to the veto suggests Fianna Fáil does not understand how it works. The veto has an impact on unsecured lending because where there is a write-down on the property, that debt is transferred to the unsecured side of the loan. This means that the credit union loan, holiday loan, credit card debt and so on are gazumped because the transfer accounts for a large proportion of what is coming in. In other words, the veto is a mechanism that will help people in distressed circumstances to secure a write-down on both their secured and unsecured debt. The Fianna Fáil position on this issue in its motion is either reflective of a complete misunderstanding of how the veto works or is merely populist posturing. Deputy Michael McGrath knows very well that for the insolvency legislation to come into law, it had to respect the property rights of loans. The idea that a loan could be taken over without any recognition of property rights is populist nonsense and another example of the Punch and Judy politics Fianna Fáil promised to abandon.

The reinstatement of the 12 month moratorium is a worrying proposal. What people need is a resolution at last of their situation. There are mortgage holders who have been making interest-only payments for the past four years. That money has been going into the banks week after week, subsidised by the State, without reducing borrowers' capital debt by a single cent. The proposal that we return to the wait and see approach adopted by Fianna Fáil in government is a very regressive one. It is only one of the many shortcomings of the motion. I urge the House to oppose it.

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