Aodhán Ó Ríordáin (Dublin North Central, Labour) | Oireachtas source

On behalf of the Minister, I thank Deputies for their contributions in this debate. I am always happy to take legislation in the spirit in which it is drafted and on its merits. Every Member is doing their best to find solutions to the issues in question. The finance committee has done some sterling work in tackling the issue of mortgage arrears. Many Deputies opposite made constructive comments. However, before they lose the run of themselves, they remind me of arsonists giving out to the fire brigade on how best to put out the very fire they started.

The Government is proposing that the House declines a second reading of this Bill introduced by Deputy Michael McGrath for several reasons. The approach proposed is over-simplistic and risks creating a range of serious negative effects. The Minister believes the introduction of such measures would most likely discourage lending for house purchase purposes and exert a negative impact on a recovering housing market. The Bill is not fully thought out on fundamental issues. It would create extensive legal uncertainty and lead to a high risk of legal challenge which does not serve anyone's interests. The Minister has already completed a review of the insolvency legislation and has clearly indicated to the House her intention to bring forward proposals in this regard.

The Minister appreciates, as does the Government, the genuine concerns that Deputy Michael McGrath and others have in raising this important issue. She is fully aware of the stress experienced by families living with unsustainable mortgage arrears who want to pay their way and keep their homes. It is for this reason that she has underlined her intention to put forward proposals focusing on this situation.

Some of the figures cited in the debate on the Bill give a distorted picture of repossessions because they risk causing further alarm, unnecessarily, to borrowers who want to engage. Preliminary figures available to the Department of Justice and Equality indicate the number of civil bills for repossession issued across the country in January 2015 was fewer than the monthly average for 2014. While this is not a cause for great celebration or to belittle the fact that proceedings are being issued, it belies some of the language used and some suggestions of an explosion or avalanche of repossessions.

For example, while I have no doubt the figures for the number of repossession cases listed before the Donegal courts quoted yesterday are correct, the fact is those figures refer to the number of repossession civil bills issued, not to the number of repossession orders actually granted. That is a very important distinction. For the whole of 2014, the average numbers of civil bills issuing each month in Donegal were higher than those issuing in January 2015. Nevertheless, for the whole of the year, only nine possession orders were granted in Donegal.

In stating this figure, I am not by any means downplaying the stress felt by people arising from court proceedings. However, it is important to emphasise that it absolutely is not the case that all or most civil bills for possession issued will lead to possession orders being granted by the courts or to a borrower who wishes to engage, losing their home. Lending institutions often issue civil bills for possession in an effort to seek engagement with borrowers who have not previously engaged with their lenders. Many of these actions result in further negotiations between borrower and bank and in an arrangement which allows a borrower to stay in his or her home.

It remains the Government's priority to ensure repossessions of family homes are absolutely a last resort, where all other avenues to resolve the arrears situation have been properly considered by the lender and have been exhausted. It is for that reason the Minister's proposals intend to focus on this issue, as she indicated yesterday.

The Land and Conveyancing Law Reform Act 2013 was raised by several Members. The Act’s objective was to deal with the legal uncertainty which had arisen as a result of several High Court judgments concerning remedies proposed by lending institutions in cases of mortgage default. The Act merely restored the position which was thought to apply when the Land and Conveyancing Law Reform Act 2009 was enacted, namely that the relevant provisions of the law in force prior to the commencement of that Act on 1 December 2009 would continue to apply to mortgages created prior to that date.

It does not give any new powers to lending institutions and includes a new provision which benefits borrowers in mortgage distress.

Section 2 of the Act provides that in any future repossession proceedings in respect of a borrower's principal private residence, the court may adjourn proceedings so that a proposal for a personal insolvency arrangement under the Personal Insolvency Act 2012 may be fully explored as an alternative to repossession. Unfortunately I have to conclude at that point.

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