David Stanton (Cork East, Fine Gael) | Oireachtas source

On behalf of the Minister for Justice and Equality, I thank Deputies for their contributions to the debate. I will make a few comments on the debate in a few moments.

The Government is proposing that the House decline a Second Reading of the Bill introduced by Deputy Michael McGrath because the approach proposed is over-simplistic and risks creating a range of serious negative effects for home owners in mortgage arrears. The Bill is not fully thought out. On fundamental issues it would create extensive legal uncertainty and lead to a higher risk of legal challenge, which does not serve anyone’s interest. The introduction of the proposed measures also risks discouraging financial institutions from lending for new home mortgages and negatively affecting our recovering house market and in particular first time buyers. I appreciate, as does the Government, the genuine concerns that Deputy MIchael McGrath and others have in raising this very important issue. We are fully aware of the stress experienced by families living with unsustainable mortgage arrears who want to pay their way and keep their homes. We have all met people in that position. That awareness underlies the raft of significant measures already taken by Government which the Minister for Justice and Equality, Deputy Flanagan, has already outlined, and a high priority is given to these issues in the programme for Government.

The Government is fully engaged, via a range of initiatives already in place and with more on the way, in helping home owners in mortgage arrears to engage with the range of free supports and expertise now available to them with a view to getting solutions in place and, wherever possible, keeping people in their homes. The Bill fails to take into account the range and impact of measures already put in place by Government, including the end of the bank veto in personal insolvency cases, the significant increase in personal insolvency applications and the new Abhaile services to help those in arrears. Take up is well ahead of expectations, and the data suggests that these measures are operating successfully. We expect their impact to continue and to expand significantly over the coming months. For example, a national information campaign to encourage further engagement with Abhaile and take-up of its services, focusing on the local level, is now being finalised and will be rolled out in the coming months. This Bill would likely to have a negative effect on the success of measures already in place to help distressed home owners.

Having considered the Bill, the Department of Social Protection and the Insolvency Service of Ireland - as well as my own Department - have warned that it would impose considerable strain on Abhaile, the Insolvency Service of Ireland and MABS and risks duplicating and greatly complicating their work without useful effect. Specific concerns raised on the implications for budget and workload and the risk of multiple appeals and legal challenges include some very important differences between the Insolvency Service of Ireland's statutory objectives and those that would be set for the proposed mortgage resolution office by the Bill. These appear problematic on an operational level. Most of all these bodies are concerned that this Bill would damage the success of those measures in helping distressed borrowers. The Minister has already referred to concerns that this Bill, unlike solutions available under the Personal Insolvency Acts, does not deal at all with an insolvent borrower's non-mortgage debts, including any judgment mortgages and risks moving the borrower from the frying pan and into the fire.

Some of the figures cited on arrears and repossessions in the debate on the Bill give a somewhat distorted picture of the situation regarding repossessions. That is important because it risks causing further unnecessary alarm for borrowers who want to engage. Deputy Michael McGrath said earlier that 1,645 civil bill repossessions were issued in the first quarter of 2017. I am told that the correct figure is 633 bills nationwide in the first quarter of 2017. That is according to Courts Service figures. This represents a drop of almost 60% from the rate at peak of the first quarter of 2015. I want to put that on the record. Deputy Pearse Doherty and Deputy Michael McGrath both referred to 76,000 to 80,000 home mortgages in arrears. The Central Bank figure is 76,422 home mortgage accounts in arrears at the end of March 2017.

See this speech in context