Jim Daly (Cork South West, Fine Gael) | Oireachtas source

The purpose of the new Insolvency Service of Ireland is to encourage lenders to come to a reasonable accommodation with borrowers which allows them to keep their family home. I am confident that this will happen, provided that borrowers make a full and honest disclosure of their affairs.

Where agreement is not reached, it will ultimately be up to the courts to adjudicate on a fair solution. This route would, however, involve great costs for the banks and, as such, they will have no interest in pursuing it where they are confident the borrower is co-operating. In a case where the debt resolution proposal is that an individual's mortgage be reduced from €300,000 to €200,000, why would the bank possibly choose to incur legal fees of perhaps €30,000, the time delay of a legal battle and the possible sale of the property for €100,000 less, which would result in the balance being written off? The appeals board Fianna Fáil is seeking to put in place already exists in the form of the courts. Moreover, it is not envisaged that it will be necessary to refer many cases to the courts as common sense will and must prevail. This proposal, if implemented, has the potential to stall the mortgage market completely and have a massive negative effect on the economy as the Government continues to rectify the situation it inherited from its predecessors.

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