Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank all the Members who made a contribution to this debate last night and tonight. By and large, it has been very constructive. The purpose of my tabling the motion was to highlight the plight of borrowers. Some 142,000 families are living in houses in respect of which the mortgage is in arrears. Furthermore, some 39,000 buy-to-let mortgages are in arrears.

I am not suggesting for a moment that the Government is not taking action. I acknowledge that it wants to resolve this issue and I am not questioning its bona fides. However, I am questioning whether it is taking the right actions. My party and I believe that, in a number of respects, it is not taking the right actions. Our view is that the Government has given far too much power to the banks. Its approach has been deferential. By any independent measure, the protections afforded to borrowers in distress have been diluted. That is beyond question. If one examines the key elements in the revised code of conduct on mortgage arrears, for example, one will note the removal of the cap on the number of contacts a bank can make in a calendar month. If after three successful contacts where the bank actually gets to speak to the borrower and the borrower cannot make the mortgage repayment in the month in question, will a fourth, fifth or sixth telephone call make any difference? It will not, but it will add greatly to the level of stress and anxiety of the affected family.

For the first time, those with the benefit of a tracker mortgage find that it is no longer sacrosanct. The bank can, as part of an overall deal if no other option is on the table, remove the tracker rate from the borrower. That is a very significant and serious development. Even more significant is the reduction in the moratorium. The length of time the bank must wait before it can initiate legal proceedings has been reduced from 12 months to a maximum of eight.

In a very bizarre contribution last night, Deputy Ciarán Lynch stated that he was very worried about Fianna Fáil's proposal to reinstate the 12-month moratorium. When I re-examined the programme for Government, I noted that Labour and Fine Gael signed up to increasing the moratorium from 12 months to two years. If the Deputy is very worried about reinstating the period of 12 months, what must they think of the two-year moratorium that the Government signed up to?

The Minister of State put a lot of stock in the issue of targets. Targets are important but the banks will no doubt, in the next week or so, say they have achieved the target of offering sustainable solutions to 20% of those in arrears. Some have stated this already, and the Central Bank will verify it. What does that actually mean? What are the targets? The banks are required to offer sustainable solutions. Page 25 of the mortgage arrears resolution targets document contains an attempt at defining "sustainable solution". It is left up to the banks to decide what it is. It can be putting somebody into an insolvency arrangement or it can be repossessing the property, by way of either voluntary surrender or court order. When the Central Bank states the banks have achieved their target of 20%, it tells us nothing. It is the composition of the offerings that is important, in addition to the agreements reached.

We must ask why there were only 144 split mortgage arrangements. Why have there been only approximately 240 permanent interest rate reductions? Why has there been no serious effort whatsoever to enter into debt-for-equity arrangements, for example? This is a question that the Government and the Central Bank will have to face up to.

I acknowledge the work of the many advocacy groups in this area, including the Irish Mortgage Holders' Organisation. Mr. David Hall was in the Visitors' Gallery for the past couple of nights. Other groups include New Beginning, the Phoenix Project and FLAC. We should listen to what they are saying because they are actually dealing with borrowers on a day-to-day basis.

I acknowledge that repossessions are inevitable in certain cases. I am not burying my head in the sand at all. There are some who would actually be better off surrendering their properties and starting afresh financially. However, there is no doubt that the structures in place and the powers given to the banks are such that there will be unnecessary repossessions. That is the key issue. We will see a significant spike in the number of family home repossessions.

There is no doubt in my mind that the vast majority of mortgages can be rescued if there is sufficient will. While it is fine to say the banks are not doing as desired, it must be acknowledged that they will act in their own commercial interest, and we cannot expect them to do otherwise. However, borrowers in distress expect that their elected Government will watch out for them, advocate for them and protect them. They expect the Central Bank to do likewise. Unfortunately, that is not what we have seen thus far.

Many Government Deputies stated that repossession is a last resort. Can the Minister of State put his hand on his heart and say the banks are currently treating repossession of the family home as a last resort? Only today I received an e-mail from a lady in County Tipperary who owes her bank €38,000 on a mortgage. She has just completed 12 months on interest-only payments. She sought a renewal of her arrangement but the bank stated that the mortgage was unsustainable and that it wanted her house. The reason it wants the house is that, when it sells it, it will clear the €38,000 loan fully and its balance sheet will be fully intact. Therefore, we need to examine what is happening. Evidence on the ground is very different from the rhetoric we are hearing from the Government and the Central Bank. The proof will be in the pudding when we see exactly what the banks have offered.

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