Catherine Murphy (Kildare North, Independent) | Oireachtas source

I congratulate Deputy Joan Collins on the work involved in this Bill and on introducing it to the House. It is a serious attempt to deal with a very serious issue but what is really good about it is that it has worked elsewhere. One could ask why we should not consider solutions that have worked elsewhere.

This week’s figures from the Central Bank show the depth of the problem. Since 2009, when it began to collect quarterly statistics, the percentage of mortgages in arrears of more than 90 days has grown by 17% or 17,000 loans. That amounts to €18.6 billion. In total, 100,000 mortgages have entered arrears. Some of the arrangements for dealing with them are temporary solutions such as, for example, interest-only arrangements or reduced payments where the mortgages are clearly not sustainable.

Reference has been made on numerous occasions in the House to a power imbalance. The scale of the figures is frightening. The Personal Insolvency Act introduced some onerous pathways for people to deal with debt problems and a power imbalance was sewn into the legislation. This Bill seeks to rebalance the relationship in favour of borrowers in difficulty. Nobody is suggesting that we embark on wholesale debt forgiveness. The Bill is strict in terms of the qualifying criteria but that seems to have escaped many speakers on the Government side. It would be available only one time per mortgage. The Bill is sensible. It is designed to tackle this unique crash which does not happen much more than once in a generation. The situation threatens the national interest. Not to engage in the exercise is itself a moral hazard. I am pleased the Bill breaks the power imbalance because that is the key to tackling mortgage arrears in an equitable manner.

The Bill makes it a requirement that a person should have tried and failed to reach an agreement with the lender in advance of turning to this option. It means one is setting minimum standards and giving a statutory guarantee to borrowers. That is a decent principle. If we take a silo-based approach to mortgage arrears, it would be as if the only cost is to the individual families who are put on the side of the road when in fact there is a cost to the State. I wish that was factored into the debate. Deputy Maureen O’Sullivan outlined that the significant housing waiting list will become even bigger because people will not be able to borrow again. They will go on the waiting list and will require rent assistance. That is not a temporary solution because there is no other solution in most major urban centres. Because of the poverty trap that is built into the system people will not be able to work and they will then be on social welfare and will be entitled to medical cards, student grants and many other supports. Such people will find it impossible to get back into the workforce. Those who are in distressed mortgages had jobs because if they did not they would not have got a mortgage. The solutions we are offering will make such people permanently unemployed and unemployable because of the lack of real choice.

We were told recently in the House that for every 10,000 people who come off the live register there is a saving to the State of €90 million. We must examine the issue in its totality. Up to now the Government is considering the issue as though it is a problem for individual families and banks. It is a problem for all of us. We must begin to consider the issue in a much more rounded way if we are to find solutions that will benefit not just the individuals concerned but society as well. I urge the Government to give the Bill a serious hearing and the opportunity to go to Committee Stage because it is serious legislation.

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