Terence Flanagan (Dublin North East, Fine Gael)
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I thank the Ceann Comhairle's office for the opportunity to raise this issue that needs to be urgently addressed. There is a need for the Minister for Finance and the Government to make a decision, as a matter of urgency, on whether to extend the moratorium on house repossessions or face to the reality and introduce a NAMA-type scheme for householders, especially those people who have large mortgage arrears and face the strong possibility of their houses being repossessed. We know from new figures published this week by the credit agency, Moody's, that 6,400 householders did not make any form of mortgage repayment last year. It is critical that some sort of an arrangement is arrived at immediately, otherwise these people will be at severe risk of losing their homes. The one-year moratorium on house repossessions is due to finish at the end of this month. These situation in which these people find themselves needs to be addressed as a matter of urgency and they need assistance.

The Minister for Finance has only kicked to touch on this issue. The Government introduced the moratorium on house repossessions but since then it has not given any guidance or reassurance to anyone who finds himself or herself in difficulty and faces the prospect of losing his or her home. The Fine Gael Party has introduced the homeowners support scheme, which will help and protect people and ensure that will retain their home. Family protection is what is needed.

There are more than 100,000 people on the housing lists throughout the country. The last thing we need is an increase in the numbers on those lists as a result of house repossessions. There are 300,000 vacant houses and the Government should help out ordinary people who find themselves in extreme difficulties

The Fine Gael homeowners' support scheme would allow NAMA to take an equity share in a property after negotiating a write down in the outstanding debt with the relevant financial institution and then the property owner would have an opportunity to service that debt directly with NAMA and an opportunity to buy back the equity stake if the owner gets to sell the property at some stage in the future. Consequently, NAMA would realise the money at the point of sale.

We know from figures published by the Financial Regulator that at the end of the September last year, 331 residential properties were repossessed by banks, which equates to one home a day having been repossessed. Yet the Minister for Finance, who is completely out of touch, said in his Budget Statement that only 20 homes were repossessed last year, which is completely at odds with the statistics. The Minister of State might comment on that in his reply.

The reality of repossession was highlighted clearly in the media in December in a High Court case involving a couple who had lost their jobs. Stepstone Mortgages would not re-negotiate an agreement with the couple to accept a mortgage repayment of €800 a month. It sought a payment from them of €2,400, which they were not in a position to meet. These people were not afforded an opportunity by that institution or any help by the Government and now find themselves as part of the homeless statistics and housing statistics. The Government and the taxpayer will have to have to pick up the tab. Clear intervention and help is required for people who find themselves in this difficulty

We know from the CSO that 77,500 households are in arrears on their mortgage repayments. The problem will snowball in the months and years ahead. It is imperative that action is taken now. The mortgage interest supplement is inadequate and is clearly not helping those who need help repaying their mortgages. The Government must loosen the qualifying conditions and include sub-prime lenders among the qualifying lenders.

I hope the Minister will have some good news. He should either extend the moratorium on housing repossessions or actually face this problem head-on.

Dick Roche (Wicklow, Fianna Fail)
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I thank Deputy Flanagan for raising this issue, because there is no Member of the House who does not understand the importance that Irish people place on home ownership. However, I must take the Deputy up on his last point. It is important to emphasise that the current code of practice will not, as the Deputy appears to believe - although I am sure his belief is sincere - be ending this month.

Terence Flanagan (Dublin North East, Fine Gael)
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It is not working.

Dick Roche (Wicklow, Fianna Fail)
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Well, it is not ending this month, which was the premise on which the Deputy tabled this matter.

Terence Flanagan (Dublin North East, Fine Gael)
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The moratorium on repossessions is to end.

Cyprian Brady (Dublin Central, Fianna Fail)
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The Minister without interruption.

Dick Roche (Wicklow, Fianna Fail)
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The code of conduct on mortgage arrears, which was published by the Financial Regulator last February, applies to all regulated lenders on a statutory basis and replaces the earlier voluntary code operated by mainstream lenders. The code applies only to mortgage lending to consumers in respect of their principal private residences in Ireland.

The main features of the code are early recognition of problems - as soon as even one payment is missed, lenders must communicate with the borrower to establish why the repayment schedule has not been adhered to and how the situation may be rectified; active management of arrears problems - a plan for clearing the mortgage arrears can be developed that is consistent with the interests of both lender and borrower and takes into consideration all viable options open to the borrower; examination of alternative solutions - the lender must explore with the borrower alternative repayment measures, including changing the monthly repayments to help address the arrears situation; and the use of repossession only as a last resort - the lender must not seek repossession of the property until every reasonable effort has been made to agree an alternative repayment schedule with the borrower.

It is important to emphasise that the code is not due to expire at the end of the month, as the Deputy appeared to suggest. The code requires a lender to wait at least six months from the time arrears first arise before applying to the courts to commence enforcement of any legal action on repossession, so there is no deadline looming after which this protection will expire. In the case of Bank of Ireland and AIB, both of which have been recapitalised by the State, this period has been extended to 12 months, also from the time arrears first arise, for the duration of the recapitalisation subscription agreement. As a further measure, the Minister has been in touch with the Financial Regulator to request that consideration be given to extending the moratorium on mortgage arrears from six to 12 months for all mortgage lenders.

The Irish Banking Federation, representing the mainstream lenders, published a statement of intent in November 2009 which provides further reassurance to homeowners who find themselves genuinely unable to maintain repayments on their principal private residence. The statement has been agreed and supported by all IBF members and is a welcome development. It is also welcome that the IBF oversight committee on the implementation of the statement of intent will include a representative from the Money Advice and Budgeting Service, MABS.

The House will be aware that there have been a number of developments relating to the Government's commitments in the renewed programme for Government dealing with protecting the family home and helping those in debt. In particular, I refer to the recent Government decisions on matters relating to indebtedness and mortgage arrears and also personal debt management and enforcement. Work has commenced on bringing forward options for dealing with these matters. In his budget speech the Minister refocused mortgage interest relief on those who bought their homes at the peak of the market. Where a homeowner's entitlement to mortgage interest relief was to expire in 2010 or after, he or she will now continue to receive it up to the end of 2017.

In addition to the code of conduct on mortgage arrears, a number of additional support measures are in place, including the mortgage interest subsidy scheme, of which the Deputy will be aware. The Government also funds MABS, which provides valuable support for families in difficulty. MABS is the main Government-funded service which provides assistance to people who are over-indebted and need help and advice in matters relating to debt management. A new debt protocol agreement has been finalised with MABS and the Irish Banking Federation which provides added reassurance for borrowers with the most difficult issues.

Historically, repossessions in Ireland have been low. A comparison of repossession figures from mainstream IBF members - that is, not including sub-prime lenders-----

Terence Flanagan (Dublin North East, Fine Gael)
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That is the problem.

Dick Roche (Wicklow, Fianna Fail)
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-----with figures from the UK Council of Mortgage lenders indicates that UK repossession rates per 100,000 mortgages are 30 times those in Ireland. Media reports of repossession cases taken through the courts show that most involve sub-prime lenders, as mentioned by the Deputy, which made mortgages available to borrowers who would not have been customers of the mainstream lenders, often because of perceived higher risks. Cases in which borrowers stopped payment after a few months, failed to respond to repeated attempts to contact them or even abandoned their houses feature regularly in media reports of repossession cases before the courts.

Suggestions that thousands of ordinary families are at risk of being evicted are far from the truth. They are unnecessarily frightening for those who find themselves in difficulty and should not be made.

Terence Flanagan (Dublin North East, Fine Gael)
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There were 331 repossessions last year. That is the reality.

Dick Roche (Wicklow, Fianna Fail)
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All estimates of the extent of negative equity appear to be based on general economic assumptions, but it is difficult to assess realistic price levels when property market activity remains low. Being in negative equity does not change one's mortgage payments, and the Financial Regulator has estimated that only a small proportion of borrowers with the covered institutions who are in negative equity are in arrears on their payments. As the House is aware, NAMA, the legislation pertaining to which has now passed into law, is designed to address systemic risk in our banking system. The suggestion that NAMA could operate for householders is not an appropriate means of addressing the issue of mortgage arrears for home owners.

Everybody accepts that we have gone through a difficult period. The Government is confident that measures taken recently, along with the existing supports to which I referred, will assist those who are in difficulty. The advice we all give regularly in our clinics to those who find themselves in this difficult situation is that the most important thing is to contact one's lender and use the facility of MABS. In this way most people can work their way through these difficulties. I accept the Deputy's premise that this is a serious issue-----

Terence Flanagan (Dublin North East, Fine Gael)
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It is a time bomb.

Dick Roche (Wicklow, Fianna Fail)
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-----and nothing I have said should be taken as undermining the compassion we all feel for those who find themselves in this situation.