Colm Burke (Cork North Central, Fine Gael) | Oireachtas source

I thank the Minister of State for being here at this late hour. This is an important issue. I have come across a number of people who have applied to their respective local authorities for loans. The process seems to be cumbersome and drawn-out. To give an example, I we contacted by a couple who applied for a loan over six months ago. They were advised by the local authority that they had to get a mortgage protection policy with a particular insurance company and they proceeded to do so.

They filled out all the documentation over five months ago. They contacted the insurance company consistently throughout January and February and were advised that the company could not give them the information about whether they had been approved for mortgage protection. Eventually the local authority wrote to them on 8 March advising them that they had been turned down for mortgage protection. Therefore, they were back to square one and had to go and organise mortgage protection. However, it turns out that the mortgage protection company had notified the local authority on 21 January and the local authority did not notify the loan applicants until 8 March, a gap of six weeks. The problem now is that by the time it eventually came for approval to the local authority the house had gone back up on the market and the price has gone up by €20,000. That is not acceptable.

It reminds me of a time when I dealt with nothing but house purchases and when people were on 18% bridging finance. The entire process was drawn out. People were on bridging finance for up to six months. They could not draw down the loan until they were registered as owners of the property, the mortgage was signed and a mortgage was registered in favour of the local authority in the Land Registry or the Registry of Deeds. We are going back to the same system as we had in the 1980s, where processes are far too slow and hurdles appear to be constantly put in place. It is time there was an audit of every local authority regarding how many applications they are processing, the timeframe from the time the application is made to the time it is approved and then with regard to the draw down of funds. Again, I have received a complaint about the delay in the draw down of funds. Vendors are getting frustrated and they are using conditions in contracts to get out of contracts because they know they can get a higher price for the property they are selling. The price of property is going up by the day. It is a major problem. It is an issue we must deal with immediately. There must be a fast, efficient system.

The other issue is why local authorities are advising people that they must have a particular mortgage protection policy. It is normally left to the person's own devices to get mortgage protection. Yes, it must have certain rules and must be in accordance with what the local authority has in place, but why is it specifying that the person must go through its company first and if the company turns the person down, he or she can start to seek mortgage protection from another company? Finally, the mortgage protection company has been engaged by the local authority. That company advised this person that the company could not correspond with the person to tell the person whether cover was being provided. That is wrong. These are the people who will be paying the premium and they are the people who should be told first whether they have the policy.

These are the issues that are arising. I am hearing this constantly from legal colleagues as well. It is a long, drawn-out process. It was fine when the market was stable and prices were not increasing dramatically. It is a different ball game now, and we have to deal with it.

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