Catherine Murphy (Kildare North, Independent) | Oireachtas source

I welcome the debate on this Bill and I welcome the extension of protection to people who to date did not have protection in regard to mortgage arrears. This is something I and others called for particularly at the time the IBRC loan books were sold when our attention was drawn to the consequences people felt they might face. Many of those who contacted us at the time were furious, particularly those whose performing loans were being bundled with other loans and sold to big organisations for a knock-down price. People felt at the time they should have been given the opportunity to buy those loans, but that is a separate issue. Their argument was that their loans could have been made more sustainable as loans teetering on the edge would have been reduced.

Our concerns regarding the Bill will be debated and perhaps ironed out and amended on Committee Stage. I have a particular concern in regard to foreign entity owners of loan books that do not have an agent in this country and also in regard to loan books we do not anticipate being sold on in the future. What level of protection will be provided for people who find themselves caught in this position? When people take out a mortgage, they expect that mortgage to remain for its duration with the lender from whom they got the mortgage. However, this position has shifted dramatically in the past few years.

The situation is particularly interesting when we look at individual cases. I have had contact with a family whose story illustrates very well that the extension of this protection will benefit not just individuals but also society. The family in question voluntarily relinquished possession of the family home. They had arrears of €3,000 and could not withstand the pressure, which had caused quite a bit of ill health in the household. One of the parents became ill, the other lost a job and the family was on a reduced income. This family now relies on rent assistance, which is a much more costly option for the State than providing protection and working through the arrears, which the family might eventually have been able to manage. Such a situation also has consequences relating to health because of the stress put on a family.

It is eminently sensible not just for the people involved but for society to extend the kinds of protections and try to retain people in a situation where at least the stress of mortgage arrears can be managed. Clearly some progress has been made on mortgage arrears. I deal with Mr. David Hall from the Irish Mortgage Holders Organisation all too frequently. His organisation has worked through the detail with many individuals towards some of those resolutions. That is part of the reason we are seeing some progress. However, that it took a voluntary organisation to engage with some of the lenders says an awful lot. Clearly institutions such as Lone Star and O3 have abided by the Central Bank code of conduct, but it was a voluntary arrangement and it should be mandatory.

Even though the arrears levels are obviously going in the right direction because of not having other housing options, a very substantial number of people go on a very long local authority waiting list, go into a very unsustainable arrangement in terms of lack of security of tenure in the private rental sector or they try to purchase. Particularly with the new Central Bank rules and with people having their homes repossessed we need to take the long view because they will find it increasingly difficult to raise finance in the future. Obviously the option of very expensive rental will become a problem of sustaining that. Particularly if somebody has been unable to service a loan, they are unlikely to be able to pay a large rent. They may be better off or may have no option but to be unemployed because of the way the rent assistance arrangements work at the moment and that does not look like changing any time soon.

So we need to look at the totality of this. In the overall scheme of things it is in our best interests to afford the maximum protection to those who are teetering on the edge or are in arrears. I would welcome if the Minister could particularly address the issue of what happens if the entity is entirely outside the State. There may be limits on what we can do or there may be something that can be added to the Bill. While I may be missing that particular point it seems that they are required to have an agent in this country. I would appreciate if the Minister could address that because that is the most problematic area.

I was supposed to say I was sharing this slot with Deputies Finian McGrath and Fitzmaurice.

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