Robert Dowds (Dublin Mid West, Labour) | Oireachtas source

At the height of the boom I remember driving through Drumlish in County Longford, which I am sure Deputy Bannon knows very well, with a friend and I was struck by the madness of the boom because a large housing estate was being built and my friend, who came from south Roscommon, asked where are the people who buy these houses going to work because he realised there was not sufficient work in Longford for people living in such huge estates. Deputy Bannon will correct me if I am wrong but I understand that estate was built under a section 23 tax incentive. From what I understand about tax incentives, they are only given if something that is needed is not being produced. However, in terms of the granting of them, unfortunately, very often that was not the case. This was also the period when 100% mortgages were granted and that combined with other factors led to the crash. While I have no doubt that Deputy Michael McGrath is sincere in bringing forward this Bill which deals with a very real and difficult issue for many families, it is very hard to take it from Fianna Fáil given that it presided over all that in those years.

In terms of the issue, the most important thing to say about people who are dealing with distressed mortgages is that no one should have to leave their home unless there is somewhere else for them to go to live and, most preferably, people's mortgage situation should be dealt with in such a way that they can stay where they are. The Minister of State, Deputy Damien English, has outlined quite a few of the ways in which the Government is trying to tackle this issue and I will refer briefly to one or two of them.

The Government is facing a dilemma in this regard because on the one hand it wants the banks to become profitable again and, on the other, it does not want to see them screwing people to the wall.

The Government has taken action in various ways on this issue. The banks were called in and the Minister for Finance made it clear that a penal banking levy or powers for the Central Bank to regulate interest rates will be considered if enough progress is not made by the banks, for example, in regard to excessive standard variable rate mortgages. There have been cuts in some interest rates. In the 2012 budget, the Government increased the rate of mortgage interest relief for first-time buyers. In the 2004 to 2008 period, the rate was increased to 30%. Major reform of the personal insolvency framework is planned where the Government has agreed to give the courts power to review and, in some cases, approve insolvency deals rejected by the banks; the legislation on that will be brought forward imminently. There is a greater role for the Money Advice & Budgeting Service, MABS, and the mortgage to rent scheme has expanded.

Progress is being made in some areas. If we consider the overall figures, 84.5% of primary home mortgages, fortunately, are not in arrears. Nearly 38,000 mortgages are two years or more in arrears, which is an area of considerable concern, but it is worth noting that over 114,000 accounts have been restructured.

Overall, good progress has been made but I urge the Minister for Finance to hit the banks hard if they do not treat these mortgage holders fairly. It is vital that mortgage holders in distress are treated as fairly as possible and that we keep an eye on the banks behaviour to ensure they treat people as fairly as possible.

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