Brian Stanley (Laois-Offaly, Sinn Fein) | Oireachtas source

I welcome the opportunity to speak on this Bill. Deputies on the Government benches gave the basic message that we cannot interfere with the markets. There was another crisis in Irish history when we heard that mantra from the British Tories. It was during the Famine when people were left to the vagaries of the free market. We know what happened then. There are occasions when governments and public bodies must intervene.

The numbers of those in mortgage distress have not been dealt with by this Government. In County Laois alone, 16% of mortgage holders are in arrears, the fourth highest percentage in the State. Many of these people are under enormous financial as well as mental pressure. During the boom, many people working in Dublin were forced to buy basic three-bedroomed terraced and semi-detached houses in the commuter belt towns such as Monasterevin, Portlaoise and Portarlington. Many of them now find themselves in difficulty due to job losses. They are also paying double the interest rate that is applied in the rest of Europe. That is a scandal which the Government has done nothing to fix.

Many of these home owners also find the price of their houses has fallen dramatically over the past six years. Many of them were bought for €280,000 but are now only worth €120,000. In my housing estate, houses were selling for €260,000 during the boom but now some have been sold for only €95,000. These are the kind of hits people have had to take. People have these enormous debts with little possibility of paying them off. They also have no prospect of even selling the house, which is doubly demoralising.

Problems with mortgage debt are exacerbated by the attitude of the banks and lenders, many of which show little inclination to come to a reasonable arrangement with lenders in arrears. In the case of sub-prime lenders, they tend to be too quick to resort to repossession proceedings. I received a letter this week from someone with a mortgage with IBRC which demanded they sell the family home within six months or it would be sold from over their heads. IBRC later sold the mortgage for a fraction of what the person paid for the house to a company called Shoreline Residential. The home owner is at the mercy of this company which is now selling the mortgage to Start Mortgages. When one does not have regulation, that is the kind of wild west capitalism one gets.

With vulture funds increasingly active in this country, the level of repossession proceedings will increase. Earlier, the Minister of State, Deputy Kevin Humphreys, said that more than 8,000 repossession bills had been lodged with the Circuit Court in 2014. In excess of 1,600 of these were lodged in the single month of June 2014. It has also been claimed that the increase in proceedings has been due to the banks and other lenders realising that property prices have started to increase again. This has given them a huge incentive to sell these homes. The banks are now far more aggressive and pushy with no tolerance for arrears.

While the courts have generally been understanding of people who have been victims of these attempted repossessions, it is notable the number of repossession orders granted is increasing. The initiators, namely, the lenders - the banksters - are becoming far more aggressive and pushy. It is vital we have legislation to deal with this area.

Banks can refuse a reasonable offer for settlement because they were given the veto in the insolvency legislation. This gap was pointed out to the Government during the passage of the insolvency legislation several years ago. The banks have used this gap since then. The Government is meant to be bringing forward measures for the courts to deal with this. However, the problem is the courts are already chock-a-block with cases and it will be cumbersome. An independent resolution body needs to be established to deal with this problem. Such a measure, along with giving the Central Bank the powers to control interest rates as set out in this Bill from Deputy Pearse Doherty, would bring relief to the hundreds of thousands of people who are suffering.

See this speech in context