Áine Collins (Cork North West, Fine Gael) | Oireachtas source

I welcome the fact the Technical Group has brought this very important issue into the House and there is no doubt that solving this major mortgage crisis in the banks is now the most important financial issue facing the Government. The matter is difficult and extremely complex, and any practical solution could have unforeseen consequences for the liquidity and solvency of our banks, and as a result, for the taxpayer.

Everybody in this House is correctly concerned about the issue and it is right for every Member to become involved in the debate and propose what is considered to be a fair solution to the problem. We are all concerned by the worry and hardship brought on by the inability to repay mortgages for decent, hard-working families throughout the country. In all our constituencies we continue to come across on a weekly basis families who are in fear of losing their home. I have known about this only too well in my constituency in the past week or two.

We would all like a simple and straightforward way of dealing with this tough societal issue but, unfortunately, despite the best efforts of all experts, this has not been possible because of the consequences any action would have on society as a whole. The resolution of the mortgage crisis would be beneficial to society in general but it must be remembered that debt forgiveness or restructuring must be paid for by somebody else, or the taxpayer in this case. Despite the significant number of families in mortgage arrears, we must also remember that there is a large number of mortgage holders in our society who are barely coping with repayments. Their efforts to keep on top of mortgages have become more difficult over the last number of years because of the imposition of necessary new taxes to solve our national deficit problem. If measures to resolve our mortgage problems necessitated an extra burden on the citizen who is barely coping at the moment, the so-called solution could make matters worse, so we must be careful about any measures taken involving debt forgiveness, as the cost of debt restructuring must be paid for by somebody else. This would come about either through increased taxation or higher bank charges and interest, which could put many people into difficulty, so we must accept there will be no quick solution.

Having said this, the Government is not happy with the way many banks are responding to Government policy and Central Bank directions. The recent intervention of the troika, setting new targets for banks for next March, is to be welcomed. One of the key problems with the Bill currently being debated is that it has no regard for the potential for moral hazard or strategic defaulting on the part of a debtor. There is also the real possibility that permitting an infringement of property rights of secured creditors, as proposed in the Bill, would be in breach of the Constitution. Any changes which could set a precedent for future alterations would undermine our credibility and have a knock-on effect on foreign direct investment.

We in the House must continue to focus on these very serious issues in a careful and considered way. We must continuously monitor the banks' compliance with the Government and Central Bank policy to ensure implementation.

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