John Browne (Wexford, Fianna Fail) | Oireachtas source

I am grateful for the opportunity to speak on this Bill and I compliment Deputy McGrath for putting forward legislation which aims to protect mortgage holders because under what is being proposed at present, they will have very little protection. The IBRC wrote to its customers recently outlining their loan position. Regarding the terms of loans, the letter asserts that customers' obligations to IBRC and their payment terms are unaffected by the liquidation of IBRC and will remain the same, regardless of who acquires the loans from the special liquidators. Deputy McGrath has already pointed out that this is not actually the case at all. If the entity that acquires the loans from the liquidators is not regulated, then the mortgage holders will not have the protection of the Central Bank, will not have access to the code of conduct on mortgage arrears and will not have recourse to the offices of the Financial Services Ombudsman. The letter sent to IBRC customers is incorrect.

The aforementioned letter also claims to provide an update to the mortgage holders on the sale of their loans as part of the liquidation of IBRC and to afford them the opportunity to make a written submission on how their loans are to be sold. One of my constituents made a written submission to IBRC on how he felt his loan should be sold. He suggested that it be sold to him at a reduced rate. He put 12 questions to the special liquidators, Mr. Kieran Wallace and Mr. Eamonn Richardson, including in what capacity the special liquidators were authorised to correspond with him and who was the proposed purchaser of the loan. He sent his submission in August 2013 and has not received a reply to date. The liquidators gave the impression that when customers made a submission to them regarding how their loan would be sold, they would have an opportunity to purchase it themselves but that is not the case. My constituent has not received a response and has not been informed of how he could go about buying his own loan at a reduced rate. He pointed out to me that Mr. Denis O'Brien and other multimillionaires are being given the opportunity to purchase these loans at a reduced rate but the ordinary mortgage holder who took out the loan in the first instance is not being allowed to purchase it at a discount. This is very unfair. The special liquidators should engage more with single mortgage holders to bring about a resolution of this issue.

The Government has promised legislation in 2015 to deal with the sale of mortgages to unregulated entities. This will be far too late for the mortgage holders in question. This issue has immediate importance for the customers of the former Irish Nationwide Building Society as the special liquidator of IBRC is in the process of selling their loans. Equally, this could apply to other banks. Most of those in contact with me have their mortgages with Irish Nationwide who feel there is an urgency about this matter. Our Bill will address the current gap in the Central Bank Act by placing a legal obligation on the purchaser of loans, including unregulated entities, to abide by the code of conduct on mortgage arrears while borrowers would also continue to have recourse to the Financial Services Ombudsman.

I welcome the fact the Minister has accepted the Bill, a positive development. However, there needs to be more urgent action from the Government in this area. People who have mortgages with Irish Nationwide and other lending institutions feel let down, believing there is no sympathy or desire to help them on the Government’s part. It is not good enough for these loans to be sold off and to be left at the mercy of those who purchase the loans. The Government should insist the liquidators allow these mortgage holders to get the same write-down as the fat cats will get. They want to avail of the opportunity to purchase their mortgages at a write-down rate which has not been granted to them yet. The liquidators just want to sell these loan books off as a going concern and to hell with the ordinary mortgage holders. I hope the Government will rethink this to allow the individual mortgage holders’ concerns be dealt with and protections for them to be built into the law as soon as possible.

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