Paul Connaughton (Galway East, Fine Gael) | Oireachtas source

I welcome the opportunity to contribute to this debate and state my support for the Government's amendment. This Administration took office following an economic crash of unprecedented proportions, which not alone put property and share prices into free-fall but also brought crashing down the carefully constructed hopes and dreams of many ordinary families throughout the country. The problem with the phrase "mortgage arrears" is that it goes no way towards describing the very real and deep distress householders feel when faced with the prospect of losing their family home. For many of them, the past five years have been the perfect storm, with plunging property prices, dramatic decreases in take-home pay, significant volumes of job losses and short-time working weeks.

Faced with great economic difficulties and the even more significant social and health problems arising as a consequence, the Government has taken action on a number of fronts. The Personal Insolvency Act was one element of this response. Over time, many thousands of householders will turn to its provisions to free themselves from the yoke of economic slavery. The Act was signed into law in December 2012, the Insolvency Service of Ireland was formally established on 1 March and its first information campaign got under way in April. Given the pent-up demand for the service, its workload is sure to be very heavy for months, if not years, to come.

Also in March this year the Central Bank took significant steps to force mortgage lenders to offer durable solutions to mortgage holders over 90 days in arrears. While the bank's objectives were praiseworthy, the action of many lenders to date has shown only minimal engagement. That is most objectionable. They have failed to engage with the notion of a durable solution and are continuing to pursue maximum settlements where the money is simply not there and never will be. For many of these mortgage holders, the durable solution they should be seeking is insolvency.

We have heard a great deal this week about ethics in business, particularly in banking. While the Government is seeking a durable solution to the problem of mortgage arrears, the banks' bottom line remains just that. It is all about the profits extracted. We have seen and heard too much in recent weeks about bankers holding sway over public bodies, but that can no longer be tolerated in the post-bailout reality. Every week in clinics across east Galway I encounter mortgage holders who simply cannot pay their debts. The mountain of debt they face is crippling them and too often exacting a huge toll on family life. Many people cannot countenance the prospect of their debt being unsustainable, but the prospect of a lifetime spent working for the banks is also unthinkable. The people concerned need proper assistance and advice and a speedy resolution to their problems. I note the efforts of the Insolvency Service of Ireland to make information available via the Internet, but a faceless website does not often provide all the answers. People are often in such distress that they need assistance in negotiating the first steps out of the financial abyss in which they find themselves. An independent advice service for borrowers is vital, given that a lack of understanding of financial jargon helped many householders into their present situation. Faced with a David and Goliath situation of confused and distressed householder versus a mighty banking corporation, it is clear that an intermediary is needed to ensure fairness towards the individual.

The Central Bank has sought to ensure banks have a range of options for mortgage holders in arrears, including trade-down mortgages, split mortgages and sale by agreement. My experience in recent days, however, is that rather than offering split mortgages which is the preference of many mortgage holders or trade-down mortgages, the banks are instead focusing on sale by agreement. Once again, this is a David versus Goliath situation where the bank requests the mortgage holder to sell his or her home by holding out as a carrot a minimal mortgage payment while the sale is being conducted. That is a very tempting prospect for many hard-pressed families, but, at the same time, the bank is shaking the stick which says that if they fail to agree, it will move to seek repayment of the full amount.

This is not sale by agreement as envisaged by the Central Bank, it is sale by coercion. Many of my colleagues have encountered similar situations and would welcome a mechanism whereby Oireachtas Members could raise such particularly obnoxious cases with the Central Bank with a view to having the options presented to the mortgage holder investigated. It would also provide the Central Bank with a window into the impossible situations facing many families in all corners of Ireland and put names and faces to a problem that is often seen in solely economic terms.

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