Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I welcome the opportunity to move Second Stage of this Bill on behalf of Fianna Fáil. We do so at a time when the scale of the mortgage arrears crisis for home owners is unprecedented. The essence of the Bill is to remove the veto that banks possess over restructuring arrangements under the Insolvency Service where a family home mortgage is involved. It is our belief that, unless decisive action is taken, we are facing an unprecedented wave of repossessions in 2015, as evidenced every week by the reality of events in the Circuit Court across the country.

Thankfully, widespread family home repossession is not a phenomenon that Ireland has experienced since Independence. However, we know that it will lead to significant social upheaval. In fact, this is already beginning to be the case. We only need to consider the impact of the laissez-faireapproach to mortgage difficulty in the UK in the 1990s to see the devastating social consequences of potentially thousands of families losing their homes.

As it stands, in the absence of a significant legislative initiative, the 37,484 people in arrears for more than two years are at a high risk of losing their homes. That is why we are appealing to the Government to accept the legislation we are proposing to give families a fair chance to put in place a restructuring arrangement that will allow them to stay in their homes. We do this in the genuine belief that, in the majority of mortgage arrears cases, if there is will on all sides, a sustainable solution can be identified and put in place.

At the outset, I will address a couple of points made by the Taoiseach when this issue was raised by the leader of our party, Deputy Martin, in the Dáil this afternoon. The Taoiseach stated: "The solution that has been put forward by Deputy Martin's party is not a solution because it is referring all of these cases to a court of law." It is disappointing, to say the least, that the Taoiseach would engage in such a blatant diversionary tactic. The fact of the matter is that these cases are already appearing before the Circuit Court. Under the insolvency regime, all arrangements put forward by the Insolvency Service of Ireland must be approved by the court. If the Taoiseach does not know this, he should. It beggars belief that he threw in this red herring. We have replicated this model, but minus the veto that the Government gave the banks.

Under current legislation, repossession proceedings must be commenced by means of a civil bill. In 2014, a total of 8,164 civil bills for an order of possession were lodged in the Circuit Court. Our Bill would avoid the need for an adversarial court setting and adapt the structure provided for in the Insolvency Service to deal specifically with the question of distressed mortgages. I stress again that we are discussing family home mortgages, not buy-to-let or investment properties.

The Taoiseach also stated: "Fianna Fáil's intention, in my view, is to impose a solution from its perspective that actually is unconstitutional." It would be useful to ascertain whether the Taoiseach sought the legal advice of the Attorney General, who is the Government's legal adviser in these matters and guardian of the Constitution. I expect that the Minister will confirm whether this is the case. I can only assume that the basis on which the Taoiseach is claiming the Bill to be unconstitutional is Article 43's provisions on protecting property rights. Based on the legal advice we have received, I do not believe this to be the case, as there are already legal provisions that limit property rights, including the established mortgage arrears resolution process. In fact, if property rights are as sacrosanct as the Taoiseach seems to believe, his colleague, the Minister for the Environment, Community and Local Government, Deputy Kelly, will not be in a position to introduce his proposed rent controls.

What we are seeking to do with this Bill is to introduce a bold initiative aimed at going a long way towards resolving a major social and economic crisis. If the banks have a problem with it, they are entitled to challenge it in the courts.

It is my belief that the premise of the Bill is constitutionally robust.

I would like to outline some of the reasons this legislation is necessary. There is a clear strategy on the part of banks to step up legal action for repossession of family homes in cases where people have fallen into arrears on their mortgages. The banks have decisively ramped up repossession actions in recent times. The rapid increase in house prices in 2014, particularly in the greater Dublin region, has given them the opportunity to substantially reduce the losses they would face from selling a home in mortgage arrears. Having kicked the can down the road for a number of years, the banks have become emboldened by the complete lack of legislative protection and by an acquiescent Government that wants to sell the State's holding in them at the first opportunity. Banks are using a variety of tactics, including direct court action as well as selling off parts of their loan books, a method that essentially amounts to outsourcing of repossession.

More than 15% of family home mortgage accounts are in arrears, accounting for more than 20% of the outstanding value of all family home mortgages. Mortgage arrears for family homes are in excess of €2.5 billion, more than three times higher than the figure at the end of December 2010. According to the most recent statistics from the Central Bank, a staggering 118,000 family home mortgage accounts are in arrears with almost half in arrears of one year or more. Since December 2010, the number of accounts more than 180 days in arrears has more than doubled from 31,000 to 74,000 cases, with combined arrears of €2.4 billion. The mortgage arrears crisis is so ingrained that more than 30% of accounts are in excess of 720 days in arrears and are worth €8 billion.

Repossession of a family home is a grim possibility for tens of thousands of families. At the last count, almost 1,400 residential properties were in the possession of banks, well more than double the figure in December 2010 but that is just the beginning, as an avalanche of repossessions is in train as a consequence of the coming into effect of the Land and Conveyancing Law Reform Act 2013.

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