Regina Doherty (Meath East, Fine Gael) | Oireachtas source

I welcome the positive figures presented by the Minister of State, Deputy Simon Harris. Government policy is being implemented to support households in arrears and Government targets have seen progress in reducing the number of mortgages in arrears across the country. The statistics we heard at the finance committee meeting today with representatives of the Bank of Ireland reflect this. More such meetings are to follow with the other banks, but it does not take a genius to see that many households are still in arrears and families are in crisis as a result. This should never be acceptable - the statistics are positive, but each household in crisis is much more than a statistic. The targets set by the Central Bank for the fourth quarter are optimistic and I look forward to seeing the results at the end of the year, given the momentum that some of the banks have built in the past 12 months, but we in this House can do much more to assist people in mortgage arrears, as can the banks.

Research by Fitch Ratings was published recently and it showed that the figure for average default expectations in Europe was around €235 billion. Ireland, Spain and Portugal are, unfortunately, the worst culprits and the research shows a growth in hedge funds seeking to take advantage of the market position. These hedge funds are buying up commercial non-performing loans and buy-to-let performing loans, but there is a dearth of options for those in mortgage distress in their family homes.

I welcome this debate and thank the Opposition for tabling the motion. I take the opportunity to set out alternative solutions to the current list of problems in this area. Everyone in the House is aware of New Beginning; unfortunately, tens of thousands of families around the country are aware of it because they have had to avail of its services. It was co-founded by Mr. Ross Maguire and Mr. Vincent P. Martin and has a new programme that includes a socially responsible element, the idea being to allow families to remain in their homes while finding mechanisms to write down unsustainable debt. The fund New Beginning has established will allow banks and the Government to co-operate to find a solution for the 15,000 to 25,000 families that find themselves unable to pay much off their mortgages. Families with loans that have been non-performing for over 240 days will be able to sell their homes to New Beginning and re-lease them over a seven year period. At any stage during the seven year period they will be able to buy back their homes at the prevailing market value. Account will be taken of any rise in property prices between the initial purchase by New Beginning and the repurchase by the family in question. It is an initiative that the Government examined some years ago, when it went by the name of "mortgage to lease", but could not implement owing to a technicality that would not allow the State to act as landlord or lessor. This is an initiative where the fund will be regulated when established and, most importantly, has a socially conscious element whereby a family will be allowed to stay in their home and benefit from a rise in the value of the property. As we all know that property prices will rise in the coming months and years, this initiative is to be praised and supported, particularly by the banks. I encourage the Government to continue to support it, as it has done in the past.

I commend Mr. Ross Maguire and Mr. Vincent P. Martin of New Beginning for their work and extend this to the organisation's staff members who work on a voluntary basis. The work is done in a quiet and consistent manner and there are families who would not be in the position they are but for the support of the organisation. The work was particularly necessary before the Government got its act together and set up the Insolvency Service of Ireland, ISI, process. The support of New Beginning has helped families in distress up and down the country.

I encourage the six lending institutions that own most mortgage debt in the country, particularly the three banks the State has supported financially, to examine seriously this offering when it comes before them in the coming weeks and months. It could help the institutions to meet their mortgage resolution process targets and will give a decent offering that is greater than the mortgage to rent offering. In my humble opinion, the mortgage to rent offering is poor, but this gives a real, socially conscious offering to families that will allow them remain in their homes. This measure should be supported and I commend the Government for doing so, but I ask that the six lending institutions, including the three main banks, examine it seriously in the coming weeks. If it is accepted, it will help the 15,000 to 25,000 families in serious distress to keep their family homes in a discreet and quiet fashion.

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