Billy Kelleher (Cork North Central, Fianna Fail) | Oireachtas source

I am glad the Minister for Finance is taking an interest in this debate. Deputies on all sides of the House have expressed concern about this issue. Nobody on this side is intentionally trying to scaremonger. We are expressing genuine concerns which are reflected in the fact that the Minister will be introducing legislation to address this issue in 2015. This House passed legislation late at night to establish the special liquidator for the IBRC and there is an onus on us to embrace this Bill. It has been described as flawed by the Minister and the Taoiseach but the principle behind it has been embraced by most Deputies. The purpose of Second Stage is to establish the principles of a Bill so that the details can be finalised on Committee and Report Stages. It will be too late to legislate if we wait until the mortgage loans of 13,000 families are sold to an unregulated entity. The families concerned are already stressed by mortgage arrears and impairments.

We should learn from history. Commitments made without legislative support have tended to ring hollow. The purchasers may agree to the code of conduct but the mortgage book may subsequently be split up and sold on in a short space of time. Every loan book contains good and bad assets. As sure as night follows day, the loan book will be divided so that the impaired assets can be sold on. This has already happened in the subprime market in the United States with Fannie Mae and Freddie Mac, which has had a major impact in a global context. However, we should also consider the individual context. The families concerned deserve the protection of this House. They have been through a lot and we should stand in solidarity with them. The most recent data on mortgage arrears from the Central Bank indicates that while the figures have stabilised, a considerable number of mortgages are two or more years in arrears. These people have no chance or hope. Deputy Creed made a valid point in this regard. We see these people in our clinics week in, week out. They are already vulnerable and lacking hope but now they face the prospect of their mortgages being sold to unregulated entities.

The Minister should accept the principle of this Bill and work with the Parliamentary Counsel and the Attorney General to fine-tune it. That would be the sensible approach in light of the views that have been consistently expressed by speakers on both sides of the House. In general the tone of the debate has been co-operative in seeking to identify a solution to this problem.

With the best will in the world, venture capital funds want to make a profit. There is nothing wrong with that in the capitalist world in which we live, but we cannot expect them to have in mind the best interest of a mortgage holder in some part of this country who is in considerable distress.

Their interest is profit. In doing that, there may be a difficulty with regard to a move to repossess some homes by subsequent purchasers of these loan books, and that is the issue of concern.

If there was no concern at all, the Minister would not even be talking about publishing legislation in 2015 to protect mortgage holders in general. I believe the Minister accepts that is an issue of concern.

The special liquidator was established by the Houses of the Oireachtas on a late night on the Minister's advice - when a Minister for Finance walks into the Parliament and says that this has to be done for the obvious reasons, Members take that on board - but the quid pro quoshould be where the vast majority of Members in this House expresses a strong view, not only to ensure that families are protected but in solidarity with families who are under significant stress and pressure, that the Members are not willing to sacrifice them and throw them to the wolves. That is something that can be interpreted by the flat refusal to embrace this legislation and move it to Committee and Report Stages and, through the Houses of the Oireachtas, to pass it in time.

Reference has been made to the possibility that the Bill may impact on the special liquidator's ability to realise the full potential of the loans, and that is the obvious reason it should be passed. By saying that, they admit that these purchasers will try to maximise the profits in the loan book and that will potentially mean threats of eviction and repossession, and repossessions. If there was no difficulty, there would be no cost to the State or to the special liquidator in trying to realise the full potential of the loan book if this legislation was in place. The statement of the special liquidator, and the Minister, that the Bill could diminish the special liquidator's ability to maximise the full potential is an indication that such inherent danger lurks there for every family who is on this loan book that may be sold to unregulated entities outside the State.

I am not definite whether the Minister agrees that these loan books will move repeatedly and become further removed from the CCMA. In my view, that will happen. Many of these purchasers will try to shorten their exposure and quickly sell off a certain proportion. Such purchasers normally like to limit their exposure and then over a period of time sell off the various tranches within a loan book. As for the idea that the Minister could come in here, or that the special liquidator could go into the Joint Committee on Finance, Public Expenditure and Reform, and state that there is an agreement in principle, I cannot believe that these funds will abide by that. Even if the original purchasers do, there will not be a perpetual covenant with regard to compliance with the CCMA for those who purchase thereafter, and that is the issue of concern.

If we, as a people, are trying to express solidarity with families who have been hurt by the downturn and the difficulties that the economy is still facing, this would be a powerful signal, not only to those who are on the IRBC loan book under the special liquidator but in general. The CCMA is working reasonably well. Banks are making an effort. Some banks could make more of an effort in trying to deal with the impaired mortgages on their loan books. It would be a welcome powerful signal, from the Government and from us collectively, that we are there to assist in what is a challenging time for families all over this country.

In view of the fact that there are other banking institutions which are winding down their loan books here as well, this issue could arise repeatedly. The other concern I would have, and this is not to scaremonger either, is that AIB, for example, does not have to refer to the Minister for Finance to sell less than €100 million of its loan book and we could easily have a situation, if there was a jolt in the international markets or the bank's viability was threatened again, whereby it might decide to wrap up some of its loan books and sell them off. It is not only in the context of the IRBC. It is also in the context of our own banks whereby they could sell loans in the market to capital funds and mortgage holders could quickly find themselves losing the protection of the CCMA as well once they are so at once remove. That is an issue that has to be addressed.

I urge the Minister to embrace this legislation, bring forward his own views in terms of Bill that he will publish in 2015, expedite the process and ensure that there is a protection on a legislative basis for borrowers on the IRBC loan books that are being sold and for others who may find that they are in a similar position in the time ahead. A stitch in time saves nine. In this case, a piece of legislation in time could save 13,000 borrowers from the stress and concerns under which they are currently living, night after night.

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