Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I commend my Cork colleague, Deputy Michael McGrath, on his Protection of Residential Mortgage Account Holders Bill and welcome the Government’s decision not to oppose the legislation on Second Stage. Mortgage difficulties are the ultimate legacy issue of the economic downturn. It is too big an issue on which to score political points, but it was the result of the bubble economy based on construction and the belief that the upward rise in property values would continue forever. We are now left with problems such as collapsed incomes, unemployment, overvalued properties and people struggling to keep their family homes.

I do not want to dwell at any length on the shortcomings of this legislation, which have been referred to by other Members. It is an important and timely debate considering what is happening with the special liquidator at IBRC. It must also be considered in the overall context of mortgage arrears. I welcome the decline for the first time in the number of home mortgages in arrears of more than 90 days since the Central Bank commenced publishing this data. It is an indicator of a small improvement but we need much more movement in that direction. I also welcome the increase in the number of mortgage restructures, which shows engagement with lenders.

When the special liquidator appeared before the Oireachtas finance committee recently, I was struck by the fact that of the 13,000-plus mortgage holders in IBRC, 900 had not engaged in any way with the special liquidator or the bank previously in respect of their arrears. Every Member knows this is the ultimate recipe for disaster. We must examine ways of enabling financial institutions, regulated or unregulated, to find ways of getting intermediaries to engage with people in arrears. I see people coming into my constituency office with mountains of paper, who are wholly ill-equipped to deal with the problem. One can see the ferocious pressure they are under. I have had people in my office whose physical welfare has concerned me. We need to find a way to reach out in a non-adversarial manner to those intimidated by the process, no matter how much it has been improved. It must be remembered there is a cohort of people who will always be intimidated by any correspondence that falls through the letter-box, whether due to illiteracy or personal inability.

If I were one of the 13,000 mortgage holders in question, I would be very fearful. The ones I would fear for most are those who are in positive equity but are having difficulties with arrears. That is the obvious kill for vulture capitalists. There are some existing protections under law through the Land and Conveyancing Law Reform Act 2013. Current court practice shows that where people engage in a meaningful way, a reasonable amount of protection will be afforded to them.

Deputy Twomey stole my line on Eircom, as I did not think anyone would see the interesting analogy between it and the sale of these loans. Eircom is but a shadow of its former self in service delivery in rural areas, as Deputy Dooley opposite knows. It has been parcelled up and sold off again and again. Everyone has taken their pound of flesh out of it, leaving a service that is a shadow of what it used to be. It is not an admirable legacy for the company’s staff, who were very committed to it, and a public dependent on it. Everyone wants to play on Patrick Street or O’Connell Street. Down in west Cork or west Clare, however, there are few telecommunications companies that want to compete with Eircom.

Vulture capitalists do not change their spots. They are in it for what they can get out of it. We would be far more reassured of the Government’s bona fides on the sale of these mortgages if we had seen the colour of its money. In other words, it is not that we want the taxpayer to bail out these mortgage holders, as the taxpayer has been hit for enough with bank guarantees and so forth. We would have liked to see heads of a Bill sent to the finance committee as a strong approach, as opposed to what might be seen as a deft kick to touch by the Government of an awkward issue, although I hope I am proved wrong about that. Those 13,000 mortgage holders deserve better.

I take voluntary codes of conduct with a grain of salt.

I fear, as happened with Eircom, that when this loan book is wrapped up and packaged on - while the bona fides of the first purchaser with whom the liquidator deals may be reasonable - we will have no reach in this House or elsewhere regarding the next step in the chain of events if the purchaser is not subject to a legally binding framework. I remain to be reassured by the Government and I would be if I had seen some evidence of the colour of its money in respect of the heads of a Bill being sent to the finance committee for further deliberation.

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