Peter Fitzpatrick (Louth, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on the proposed Family Home Mortgage Settlement Arrangement Bill. The purpose of the Bill, as described by Deputy Michael McGrath, is to assist mortgage holders in arrears and to address the current haphazard and inconsistent manner in which arrears are tackled. Every week, I deal with people in my constituency who are in mortgage arrears and meet with them and their banks to try to put in place amicable arrangements that are workable for both parties. As recent figures indicate, my home county of Louth has one of the highest percentage of people in mortgage arrears, which is a direct result of the policies, or lack of policies, of the previous Government in keeping lending and house prices under control. For example, the cost of a standard three bedroom semi-detached house in Dundalk rose from €35,000 in 1998 to over €220,000 in 2007, which is an increase of €185,000 in under ten years. This situation was unsustainable. We now know the Government of the day, led by Fianna Fáil, did nothing to keep the situation under control. It did not attempt to cool the market. Its inability to regulate the banks, despite the many warnings to it in this regard, led to continual over-heating of the market.

Deputy McGrath's Bill proposes a number of provisions, including the introduction of family home mortgage settlement arrangements whereby the mortgage holder in arrears may instruct a personal insolvency practitioner to work on his or her behalf in coming to an arrangement with a financial institution. The Bill also provides that the mortgage holder in arrears can enter only one arrangement. Section 7 provides that a protective certificate can be issued for 180 days and be extended only once. Section 9 provides that the personal insolvency practitioner shall prepare on behalf of the person in arrears a proposal for a family home mortgage settlement arrangement as soon as is practicable after the protective certificate is in place.

Section 11 of the Bill provides that once the family home mortgage settlement arrangement is in effect, a financial institution can apply to vary or terminate it.

I cannot support the Bill as it currently stands. As I noted earlier, I deal with this issue on a weekly basis on behalf of my constituents. The Bill will not help them in any way. It does not acknowledge the Government's ongoing commitment to assist home owners in mortgage arrears or the progress we have made to date in this area. The number of people in mortgage arrears has fallen by more than 25,000 since 2014 and nearly 115,000 restructuring arrangements are in place. The Bill fails to address the complex nature of debt solutions in a fair and equitable manner. Personal insolvency legislation already provides remedies for mortgage holders in arrears and all of the options proposed are already provided for under the personal insolvency arrangements.

The Bill is not only deficient but will also create a series of negative repercussions for everybody involved in this process, including mortgage holders in arrears, the courts, lending institutions, new applicants for mortgages, particularly in respect of principal private residences, and the continuing operation of the personal insolvency system. It ignores the fact that settlements on family homes can be made through personal insolvency arrangements. Even if I were to agree with the principles of the Bill, it would not be possible to accept it as it is currently drafted as it is very weak. The Deputies opposite are well aware that the Government recognises the importance of ensuring the banks engage with personal insolvency arrangements. The Departments of Finance and Justice and Equality are currently working on proposals for making the insolvency legislation more effective in supporting the many people who are trapped in unsustainable debts and reaching solutions that are sustainable for all parties. I recommend that the matters raised in the Bill be referred to the Joint Committee on Justice, Defence and Equality for its consideration.

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