Joe Costello (Dublin Central, Labour) | Oireachtas source

I welcome the opportunity to speak on the Mortgage Restructuring Arrangement Bill. I compliment Deputy Collins on producing the Bill and introducing it to the House in order that we can debate the issue. Mortgage arrears are one of the most significant problems that continue to face thousands of people in this country. We must make every effort to help people in mortgage distress in order that they are able to get on with their lives. As long as a serious effort is being made to deal with the situation, we must avoid any situation where a family loses the roof over its head because of an inability to meet its payments, irrespective of the attitude of any financial institution. That is the key to the approach we should take.

A policy of putting the interests of big developers and the banks ahead of people seeking to purchase a home was a direct cause of Ireland's disastrous property boom and bust. However, this Government is committed to helping home owners in distress to weather the current economic problems and ensure Ireland has a sustainable housing policy. It is essential we do everything we can to help people in mortgage distress. Unfortunately, the provisions in this Bill have a number of serious drawbacks. The Bill essentially proposes the introduction of a new personal insolvency arrangement in addition to the three new debt resolution arrangements introduced in the Personal Insolvency Act 2012. The imposition of a settlement on the creditor without proper regard to all the circumstances is at odds with the negotiated approach taken in the Personal Insolvency Act.

Furthermore, the Bill would encourage people to default where their circumstances do not warrant it. If a large number of people were to do so, it could cost financial institutions billions. While I have little sympathy for the financial institutions, our economic well-being requires that we return to having banks that function. Yesterday saw the anniversary of the disastrous bank guarantee, which only the Labour Party had the good sense to oppose at the time. In any case, the financial institutions are now, in large part, publicly owned, and it would be the public and taxpayer who again would be left to pay for the Bill's provisions.

The Government has developed a credible set of measures to assist those in mortgage arrears. Budget 2012 introduced a special mortgage interest relief rate of 30% for the tax years 2012 to 2017 for first-time buyers who bought their sole or main residence in the years 2004 to 2008 or paid their first mortgage interest payment in this period. This measure offers special assistance to those who bought their homes at the height of the boom and are now likely to be in negative equity. The mortgage-to-rent scheme should be used to a greater degree.

The Personal Insolvency Act is a major advance on previous legislation and should encourage banks to reach an agreed solution with individual borrowers to resolve mortgage arrears problems. Important additional steps have been introduced by the Government to deal with mortgage arrears. They include the code of conduct for mortgage arrears, the resolution targets set by the Central Bank for financial institutions in relation to mortgages in arrears, and the protection included in the Land and Conveyancing Law Reform Act whereby a court can permit an adjournment of a repossession action for consideration of a possible personal insolvency arrangement as an alternative to repossession. That function should be used to a much greater degree.

We have seen the number of people experiencing difficulties with mortgages . As of June 2013, a total of 97,874 or 12.7%of private residential mortgage accounts were in arrears of more than 90 days. That is an horrendous figure. Furthermore, 223 properties were taken into possession by lenders during the second quarter. Of those, 63 were repossessed on foot of a court order and the remaining 160 were voluntarily surrendered or abandoned. I previously outlined in the House two cases in which I have been involved that are live issues. The first one involves a self-employed project manager who became unemployed and was entitled to no support from the State. He has three young daughters in secondary school. He was not entitled to jobseeker's allowance, mortgage interest supplement or support from a community welfare officer. After a lengthy process, he got jobseeker's allowance but he was refused mortgage interest supplement because his wife isworking, although it is a meagre wage. The repayments for a home that was bought during the boom are substantial. Despite that, two years later he has been served with an ejectment order because no meaningful restructuring has taken place. That is why it is so important that the current provisions are implemented, and done so effectively.

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