Michael Moynihan (Cork North West, Fianna Fail) | Oireachtas source

I compliment Deputy Michael McGrath on bringing this Private Members' motion before the House. It is one of the major issues. There is not a public representative in the House who is not encountering mortgage difficulties in his or her constituency and clinic. The mortgage is one of the biggest outgoings of any family, and families are seeing the rip-off they are experiencing at the hands of the banks, particularly with variable mortgages. Nothing is being done about it. Nobody in the Government has taken the lead or got to grips with it, and it needs to be addressed. Nearly all cases of pressure from the banks and home repossessions that I have encountered have been in respect of variable rate mortgages. The banks have been grossly unfair in how they have been dealing with home owners.

I will leave aside debts for business investments and farms, and deal only with home mortgage arrears and interest accrued. A large amount of interest has been piled on. When we go to the banks in real negotiations and go through the figures, fill out the forms, take into account incomes and outgoings, and try to come to some kind of arrangement, whether by extending the loan or something else, some of the banks have been intransigent. I have been negotiating along with one family for nearly three years, and only within the past few weeks, after highlighting the case at every level I can within the bank, have we got traction. There is no serious intent on the part of the banks. The banks give the line that the last thing they want to do is to repossess houses. In my opinion, they are going bald-headed for family houses belonging to people who have only one property. These people, through no fault of their own, perhaps due to the loss of a job or an illness in the family, are finding it extremely difficult to meet their mortgage repayments. Such people must decide which bill to pay first - the mortgage or, perhaps, a medical bill. These are challenging issues that face people and it is grossly unfair of the banks. It is high time the Government hauled the banks in to discuss the variable interest rates on mortgages. Although it is fine to see the banks saying they have returned to profitability, they are doing so on the backs of homeowners.

My colleague Deputy Niall Collins mentioned insolvency. For the people I am dealing with and their difficulties, the legislation is not worth a hat full of crabs. We must be very straight with each other at Government level and around this House. The existing legislation is giving no protection to the people who have one property, a family home, which can be managed over a period of years. The Government must ensure the banks step up to the plate, because families in this country are going through hoops left, right and centre. They have cut back on every possible expenditure. I have filled in forms with them to make cases to the banks, and the same response comes back time and again. We must be very straight with ourselves in acknowledging that the existing machinery is not working and that we must challenge it in a significant way.

On the business side, families that have had to restructure loans for a whole variety of reasons, who may have had an excellent interest rate over recent years and been significant banking customers, are being disregarded by the banks. These are people who have performing loans and who have worked very hard to ensure they honour their commitments. Yet the banks disregard their track records and the goodwill that should have been built up with them. Tonight, we are dealing with the variable interest rates and the way the banks are treating home owners, particularly those in difficulty who are being threatened with repossession. The machinery of the State is not working and is failing them, and it is high time the Government and this House took initiatives to enshrine the basic principle of retaining the family home. This should be one of the most important issues for us.

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