Tom Barry (Cork East, Fine Gael) | Oireachtas source

We must remember that the country is recovering. I am not smiling when I say that. In such a recovery, people have the opportunity to repay more than they thought they could some time ago. It is important that we have a solution for every person involved. Ironically, the solutions fitting mortgages may also help a sector with which I am involved, that of small businesses. Most of these businesses have some non-core debt, which can be as grave as mortgage debt in that it can pull down the core business. Solutions involving the stretching of non-core debt and resolutions affecting non-core debt are important, because this relates to people's jobs. These businesses are starting to grow, thanks be to God.

I do not like the inclusion of the word "mandate" with regard to creditors and mortgage servers. A deal must be done in a spirit of agreement between both parties, taking into account the full aspects of the code of conduct on mortgage arrears. Both parties must be genuine in their approach. Mandating somebody to do something would mean one party would leave unhappy. Both parties must hope a resolution can be achieved fairly.

There is some merit in the idea of a split mortgage with no interest on the warehoused portion. If a person with a €200,000 asset can only afford to pay interest and principal of €100,000, the balance of €100,000 would be parked. If that person passes on the house to a son or a daughter with €100,000 left to be paid, but the value has risen to €300,000, there is surely a case to be made that some portion of the interest should be paid in a fair way. These moneys must be returned to the State. I would gladly take on an asset if I knew I could take it on at 50% of current value. We must be practical, and we cannot have the State bear all the burdens where mistakes have been made. We must ensure the process can be fair to the State also. Many people in the House have given out about how we all were burdened with debts from the banks and nobody will appreciate us adding more unnecessary burden to the taxpayer. The people would certainly reward us if genuine compassion were shown towards people with family homes.

There are people with second homes or buy-to-let properties. If a party cannot afford the payments on a buy-to-let property, the issue is not as serious as if it is a primary dwelling. If the problem cannot be dealt with, the properties should be recycled into the system and the noose should be removed. I agree that we need to know what will happen when properties are surrendered. When banks do deals with people, they are working as best they can.

It is important that both parties participate honestly and with genuine interest in ensuring it can be a fair deal. It should not be a sweet deal for one party and it should apply equally to both. It is very popular to give out about banks, but I have dealt with them for many years. I have been in business for 20 years and I have dealt with banks from when there was no money available in 1991. There is now a realisation that the people who have come through this recession have been toughened and will survive. They will thrive, in time, but they must be given some breathing space. In my experience, and particularly in the past two years, some banks have acted very responsibly. We have brought constituents to met their representatives on a regular basis and although this may have been a difficult experience a couple of years ago, there is now a real willingness to engage. That is fantastic. Only two weeks ago I brought in a couple who were in dire straits and were almost afraid to discuss the issue. Although they were paralysed with fear initially, they realised the people from the bank were not that frightening. It is very easy to blame banks, but we have a responsibility to deal with this issue.

The code of conduct on mortgage arrears and the Keane report have been very helpful. Many people do not realise how helpful they are. When debt is burdensome, some people may fail to interact as they would if they were in the best of health. Mortgages were given out to people who should not have got them. For example, mortgages were given to people over 50, who were expected to be healthy and wealthy for the next 20 years. That was a lot to ask. Others got mortgages for houses they could never afford. We need to achieve a sense of realism, and the country cannot offer interest-only deals on mortgages where the house value bears no relation to the means of the people living in it.

This is a very important discussion, and things are changing. It was a much graver debate three years ago, as nobody could see the light at the end of the tunnel or foresee a recovery. A growth rate of 4.6% or 4.7% is colossal. It means there are many more people at work and people are able to contribute more. They may not be able to contribute the full amount of an initial mortgage, but the solution is evolving more quickly every day.

Property prices are increasing and negative equity is becoming less of an issue, though it still exists. Negative equity does not determine the ability to pay off a debt. Many of us own properties that are in negative equity and we pay for them fully if we can. If a working person can afford to pay an agreed mortgage, negative equity resolves itself in time. We must be careful on this issue because we cannot land taxpayers in greater debt while allowing anyone in arrears avail of these measures, rather than genuine cases. If this is opened too broadly people will try to exploit it and that would be wrong. As always, we must first protect people in family homes and thereafter apply a system of priorities. We must examine whether extra houses are required and see what to do about rental properties as they have presented problems. Some people with buy-to-let properties have taken rent and paid nothing back.

Things are changing and this discussion is important. People who are genuinely in debt should talk to their mortgage providers in the spirit of that agreement. Banks have the ability to deal with the problems that exist.

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