Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein) | Oireachtas source

Sinn Féin will not be opposing the passage of this Bill on Second Stage. However, there are several points which I wish to put to the Minister of State and which it is important to put on the record of the House. I note that no amendments were brought to the Bill in the Seanad and we hope to see it progress swiftly.

The Bill provides for matters relating to mortgage repossession proceedings and related court matters. My understanding is that it requires judges to have regard to the overall proportionality of repossession and the family circumstances of someone who may be facing repossession and the loss of a home. I will focus on section 3, given it is the substantive section of the Bill. Subsection (1) broadens protections for the borrower, if the borrower has previously engaged the services of a personal insolvency practitioner to assist in the resolution of his or her mortgage arrears problem, or the borrower has participated in good faith in a scheme designed to enable indebted borrowers to remain in their principal private residences. This is welcome, given good faith is generally a ground on which banks contest. I know anecdotally of cases where the banks have said they have engaged with the borrower but where they have outlined completely unrealistic deals to ensure payment and then stated that the borrower had failed to engage as he or she could not meet the demands of the institution. That is somewhat disingenuous in the first instance and ignores the principle of what is really meant by good faith.

Subsection (2) provides that when considering whether to make or refuse to make an order for possession in repossession proceedings, a court must take account of the matters referred to in subsection (3), some of which are of particular note, namely, whether the order is proportionate, if the borrower has children, and the conduct of the parties in any attempt to find a resolution to the borrower’s mortgage arrears difficulties. These are all welcome measures and it is also welcome that the State seems to be, albeit late in the day, giving weight to cases where minors, in particular, are involved. I am sure all of us hope this will go some small way to preventing a further increase in the record number of 4,000 children who are homeless in the State.

We must bear in mind that while this Bill represents progress, the other policies of this Government are still causing misery and adding to the housing crisis and the mortgage arrears crisis. The vulture funds, which the Government seems very happy to facilitate, are causing huge stress and concern. I hope the No Consent, No Sale Bill 2019, which Fine Gael voted against and which would have empowered borrowers, comes to pass in some way, shape or form in the not too distant future. We also express frustration at the Central Bank's decision to amend the code of conduct on mortgage arrears and the Government's acquiescence thereto. This key commitment of the programme for Government has been broken.

In expressing some reservations about the Bill, I draw attention to section 2A(3)(f). According to the explanatory memorandum, this provision means the court may take account of a lender’s refusal or reluctance to engage in attempts to find a resolution of the arrears issue and of a borrower’s refusal to engage meaningfully with the lender to find such a resolution. There may be a danger here that we will introduce a double edge whereby, for the first time, the behaviour of a borrower can be held against him or her. There may be many reasons a borrower will not engage, including pure fear or a lack of capacity to face a bank on an equal footing, which is seldom the case in any event. This subsection needs scrutiny and possible amendment. Who is to be the arbiter of “meaningful engagement”?

Section 2A(6) deals with personal insolvency agreements. Section 2A(7) deals with the ability of the Minister to establish a scheme to assist borrowers who are at risk of losing their homes. The objective of such a scheme, as stated in the explanatory memorandum, must be to provide those borrowers with arrears difficulties in respect of their principal private residences with assistance that is reasonably likely to enable them to address these difficulties and facilitate them in remaining in their principal private residences, that is, their homes. This is potentially an interesting proposal which may be of benefit to the borrower. I will reserve judgment on this until details are provided, but perhaps the Minister could address that in his concluding remarks.

More broadly, I echo some of the sentiments expressed previously by me and my party colleagues. I am very concerned by the changes to the legal aid rules introduced at the end of January. There is already plenty of inequality between the bank and the homeowner. These changes create a further inequality in representation between the banks and vulture funds, on one hand, and persons applying for insolvency, on the other. Until now, if someone was applying for personal insolvency or appealing the refusal of the banks to grant one, he or she could avail of the advice of a solicitor and barrister. On 31 January, the Government removed the right to a barrister for the debtor in court other than in exceptional circumstances. It also halved the fees for solicitors and personal insolvency practitioners, making it much less likely that people will take cases. This will make it much easier for banks and vulture funds to repossess homes. Members should bear in mind that borrowers are taking on banks which will have the very best legal representation available and will be dealing with very complex legislation. To all intents and purposes, this is an attempt to disarm the debtor who may be fighting possession. It is a serious inequality of arms.

A very significant proportion of appeals against a refusal by a bank to engage in the insolvency process are successful. If the banks are facing strong legal opposition, they may be more likely to agree to engage in the first instance. However, if a bank is facing much more limited resources, with the bank potentially having senior and junior counsel and the debtor not having any barrister, what is the incentive for the bank to engage? The Government appears to be driven to undermine the protections which the mortgage holders have and to assist the banks and vulture funds, which is shameful. The Bill is being framed as an attempt to rectify the very serious imbalance that exists. While this legislation is welcome, it does not do enough when contrasted with the various policy decisions I have outlined. The Government is essentially giving crumbs to the homeowner, on the one hand, and giving banks and vultures a feast, on the other.

I once again express my support for the Bill despite those criticisms of Government policy generally. It is welcome although it is very modest. We will support it and I hope it can progress through the remaining Stages relatively swiftly.

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