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

This misunderstands the figures because many people took out second mortgages. The number of mortgage accounts in arrears is significantly bigger than the number of mortgage homes in arrears. The Department of Finance indicates and the Central Bank states that there are an average of 1.3 accounts per mortgaged home. Accordingly the number of homes in any level of mortgage arrears at the end of the first quarter of 2017 is approximately 59,000. It is still an awful lot, but it is not 76,000 or 80,000. The data simply does not support the persistent media claims of an impending tsunami of repossessions. Court repossession statistics are falling steadily and significantly, whether we look at the issuing of new proceedings or the making of possession orders.

We still have too many mortgage arrears cases, and action to reduce them remains a priority, but the progress made to date is very encouraging. In stating this I am not by any means seeking to downplay the levels of stress and anxiety felt by people arising from court proceedings. However, it is important to emphasise that it is absolutely 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 the lenders. Very many of these actions result in further negotiations between borrower and bank, ending in an arrangement which allows a borrower to stay in his or her home.

Mortgage to rent has been mentioned. Work is continuing to implement further programme for Government commitments in this area. Further measures being developed by Government include significant expansion of mortgage to rent. This is a particularly invaluable initiative as it targets those home owners who do not have the financial capacity to support mortgage restructuring or a personal insolvency arrangement. The review of the mortgage-to-rent scheme was a priority under Rebuilding Ireland and was published on 8 February 2017. It identified a number of important reforms to make the mortgage to rent process quicker, more transparent, easier to navigate for borrowers and ultimately more accessible to more households in mortgage distress. The key changes to the scheme identified in the review include the introduction of flexibility in terms of the size of properties which qualify for the scheme. In practical terms, this means that an assessment of the property size suitable to a particular household will allow for a maximum of two additional bedrooms in the property above the actual need of the household, with the property still being considered eligible.

The property price thresholds for eligibility under the scheme have been increased in line with the acquisition thresholds for social housing generally. The threshold for a house in Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow has been increased to €365,000, while the threshold for an apartment or townhouse in these areas has been increased to €310,000. For the rest of the country the threshold for a house has been increased to €280,000 and for an apartment and townhouse to €210,000. The most significant increases are in the more rural locations, which is consistent with market findings. These thresholds will be subject to regular reviews taking account of the market at the time and will continue to remain in line with the acquisition thresholds for social housing generally. A significant change is that the application by the borrower for social housing support will be made by the borrower to the local authority prior to submitting the mortgage-to-rent, MTR, application to the housing agency. This change means that from an early stage, the borrower will know of social housing support, SHS, eligibility or not and if not eligible, will need to focus attention on other options to deal with their debt. New property valuation procedures will be put in place. A new communications protocol for MTR will be agreed and implemented to cover communications between all stakeholders and at all stages of the MTR process. The process by which the necessary repairs to property are costed will also be revised to speed up the process of agreement between all parties. Changes to the eligibility criteria and other process changes became effective on 27 March 2017 and are already delivering welcome results. The other changes are being progressed actively.

It remains the Government's priority to ensure that repossession or other loss of the home is absolutely a last resort where all other avenues to resolve the arrears situation have been properly considered by the lender and been exhausted. The Government is determined to ensure that help is available for home owners in mortgage arrears who want to engage in finding a sustainable solution to their financial difficulties and to continue its work in getting a range of sustainable solutions in place which can, wherever possible, keep people in their homes. For the many and important reasons outlined earlier, however, I do not believe the proposals contained in Deputy Michael McGrath's Bill are the right solution nor that they would have a positive impact on the situation of the borrowers we are trying to help or the mortgage arrears problem or the housing market.

The number of owner-occupied mortgage accounts in any level of arrears has fallen from 141,639 at the peak in September 2013 to 76,422 at the end of the first quarter of 2017, a drop of almost half. This is equivalent to an overall drop of approximately 109,000 mortgage homes in any level of arrears in September 2013 to approximately 58,786 at the end of March 2017. The mortgage account statistics produced by the Central Bank include second mortgages on the same property. The rule of thumb used by the Department of Finance is that the number of mortgage accounts is 1.3 times larger than the number of mortgaged properties. The Central Bank also indicates that 120,894 private dwelling home, PDH, mortgage accounts have already been restructured and that overall, 87% of borrowers are meeting the terms of their restructure. Some 447 applications have been made to the courts under the new personal insolvency court review under the Personal Insolvency (Amendment) Act 2015 where creditors refuse a personal insolvency proposal by a borrower which is considered reasonable by the personal insolvency practitioner. The review appears to be operating successfully and has already been interpreted and applied in several High Court judgments.

Uptake on the Abhaile service is well ahead of expectations. As of 7 July 2017, 8,034 vouchers for free financial legal advice from a personal insolvency practitioner, or a panel run by the Insolvency Service of Ireland, or a solicitor on a panel run by the Legal Aid Board, had been issued by the Abhaile service. At the end of June 2017 the Money Advice & Budgeting Service, MABS, in-house mortgage debt advisers, who are now also part of Abhaile, had helped almost 4,000 borrowers and 1,300 borrowers facing repossession had been referred by MABS mentors for specialist help and advice. Up to the end of August, Abhaile duty solicitors will have attended almost 500 repossession lists before the county registrar across the country to provide legal assistance to unrepresented borrowers wishing to engage with Abhaile. Data collected on the 1,565 borrowers who consulted a personal insolvency practitioner under Abhaile indicate that the Abhaile service is reaching its main target group of those in the deepest arrears. Insolvency Service statistics indicate that two thirds of the borrowers were in the deepest category of arrears exceeding 720 days payment. For all these reasons the Government is opposing the Bill.

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