Pearse Doherty (Donegal South West, Sinn Fein)
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At the end of March of this year, there were 116,288 mortgage holders in serious distress. This represents an increase of 8,580 since December 2011. If we look from January through to March of this year, 95 mortgage holders fell into distress every day. That figure is stark and worth repeating. It is a shocking figure and also represents a significant acceleration of the mortgage crisis. There has also been a significant increase in the number of repossessions in the first three months of the year. Some 170 families lost their homes to repossession the first quarter - an increase of 28% on the last quarter of 2011. Of course, these figures do not include the tens, if not hundreds, of thousands of households which are not yet in serious distress but who are struggling every week to make payments and meet their mortgage payments, nor do the figures give us the real sense of hardship and stress caused to families from the crisis. Let there be no doubt but every night there are people who must try to decide whether to pay their mortgage or put food on the table for their children. That is the stark reality behind all these figures. These families are struggling to cope with the impact of unemployment, under-employment or loss of income. Their daily struggle is being made all the harder by VAT increases, the household charge and other measures imposed on them by the Government in last December's budget.

It is worth remembering that Fianna Fáil created the mortgage crisis - it took place on its watch. The policies of Charlie McCreevey, Bertie Ahern and Brian Cowen inflated the property market and saddled an entire generation with an astronomical level of personal debt. While Fianna Fáil drove this economy over a cliff, hundreds of thousands of ordinary decent Irish citizens were left to pick up the pieces. After 2009, when the full extent of the mortgage crisis became clear, what did Fianna Fáil do? It formed an expert group which produced two detailed reports. Did Fianna Fáil act on the recommendations in these reports? Did it devote time and energy in its last months in office in an attempt to undo some of the damage it brought upon distressed mortgage holders? It did not. It sat on its hands and did nothing. Throughout the debate on the Personal Insolvency Bill, the role of Fianna Fáil in this crisis must not be forgotten.

On coming into office Fine Gael and the Labour Party made a big promise. They promised to deal with the issue of mortgage distress. Almost a full page of their programme for Government was devoted to this issue but just like Fianna Fáil, the new Government commissioned an expert group to come up with solutions to the crisis. The Keane report was published in October with a further round of recommendations. It was, like Fianna Fáil's predecessor, cautious in approach, offering little in the way of real solutions to the vast majority of people affected by the crisis.

Eight months have passed since the publication of the Keane report and 15 months have passed since Fine Gael and the Labour Party took office. In all of that time no meaningful measure has been put in place to stem the growing number of home owners in mortgage distress or to assist those weighed down by the pressure of arrears. The approach of Fine Gael and the Labour Party to the crisis is characterised by exactly the same attitude as Fianna Fáil. Until now they have adopted a hands-off, leave it to the banks approach - kicking the can down the road in the hope that something else or somebody else will address the problem.

The quarter on quarter increase in the numbers of households in mortgage distress and the growing number of repossessions is evidence of the failure of the Government to take the mortgage crisis seriously. Finally, after much delay - much of it at the behest of the banking industry - the Government published the long promised personal insolvency legislation. Sinn Féin has been calling for this legislation to be introduced for a long time. My colleague, Deputy Jonathan O'Brien, outlined in detail our position on the Bill and he will do so in further detail on Committee Stage.

While we welcome the publication of this long overdue legislation, it will be a source of disappointment to the thousands of families in mortgage distress who were eagerly awaiting it and who held out hope that it would be a resolution to their problems. When the heads of the Bill were published, Sinn Féin said that it was essential that the proposed insolvency service be independent and that a more humane approach to bankruptcy was needed. We also argued that it should be non-judicial, include an appeals process, and, crucially, have the power to force reasonable solutions on lenders. Unfortunately, this Bill gives lenders a veto over the personal insolvency arrangements. This is not the right approach.

The only other option open to people in serious arrears is bankruptcy. The suggestion that the threat of bankruptcy gives the distressed mortgage holder some kind of leverage over their lender is a very dangerous one. If it were the intention of the banks to genuinely work with home owners to make their mortgages more sustainable, then we would not be seeing such an increase is the distress figures. The banks, like the Government, are not doing enough to assist families remain in their homes. Sinn Féin will be seeking to amend this crucial legislation, in particular this crucial section, because without an element of compulsion on lenders, the mortgage crisis will, unfortunately, continue to grow. It is also deeply disappointing that there is no appeals process built into the legislation. Again, Sinn Féin will try to bring forward amendments to deal with this issue.

While we welcome the shortening of the bankruptcy term from 12 to three years, we are mindful that anybody entering bankruptcy will lose all their assets, including their family home. Since the start of this crisis, Sinn Féin has argued that the most important principle which must underlie Government policy is working with distressed mortgage holders to enable them to remain in their family home. This will require, on a case-by-case basis, restructuring mortgages to make them sustainable and the lenders to absorb a portion of the losses in many cases.

We have never argued for a blanket debt write-down. However, we strongly favour a targeted debt resolution process in which banks accept responsibility for their part in the crisis.

Given that last year alone the pillar banks received over €17 billion of taxpayers' money in recapitalisations there is simply no justification for banks refusing to absorb some of the cost of this crisis. There is sufficient capital in the pillar banks to cope with a portion of the losses.

Across the country people are looking to this House for solutions to the crippling level of debt and mortgage distress with which they are living. They need the Government to intervene to give them some kind of hope that there is light at the end of the tunnel. The Personal Insolvency Bill has the potential to provide tens of thousands of families with that hope, but only if it is amended appropriately.

I hope the Minister will keep an open mind on the issues raised when we deal with the Bill on Committee Stage.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Figures released today by the Central Statistics Office record that the number of suicides has risen by 7% in the past year. Some 525 people took their lives in 2011 although some believe the real figure was as high as 600, or even higher. The figures for 2012 show another alarming rise in suicides with an average of three people a day taking their own lives, which could mean that the number of suicides may double this year. Experts also agree that economic and financial problems have a major impact, with one report I have seen stating that every 1% increase in unemployment leads to almost an equivalent increase in suicides.

Personal debt is clearly a factor as many people find themselves unable to cope with massive personal debts which they see no way of ever clearing. Mortgage debt is clearly central to that and it is to be regretted that the Bill goes nowhere close to tackling that problem. We require far more radical measures, including the need to address the issue of negative equity and the fact that many mortgages were taken on for houses which are no longer worth anything like what they were when the mortgage was taken out. In many instances house prices were greatly inflated by reckless lending and the absence of accountability or control. House prices were also inflated by the attitude of the Government at that time.

Substantial numbers of people are in financial difficulties due to contracting mortgages and loans with sub-prime lenders. Many now find it impossible to pay back the loans and have fallen into serious arrears due to unemployment and falls in income. The banks themselves play a negative role in this. Continually, people come to my clinics who are unable to meet mortgage repayments and are trying to negotiate interest only or reduced repayments for a period of time until the economy improves. In many cases, the banks are not co-operating, nor are they co-operating with small businesses that are struggling to survive in order to keep people in employment.

The banks are the country's new landlords. It is the banks that are carrying out repossessions and taking over family homes, property and small farms. They are filling the role of the landlords of 150 years ago.

The situations caused by banks are greatly exacerbated in the case of certain lenders who charge huge interest rates, impose massive penalties on people in arrears and resort to proceedings to gain possession of properties, even when they have been given reasonable offers for repayment. Some of those in that situation may perhaps be adjudged to have been ill-advised in taking on high interest loans, but in many cases they are people who were unable for various reasons to get mortgages and loans from the high street lenders. Some have questioned the ethics of these lenders and it is not surprising that the most aggressive pursuers of repossessions are sub-prime lenders like Start.

Some of you will also be aware of Wise Mortgages which is currently pursuing the repossession of a farm through the courts, even though the person concerned, whom I know personally, has offered, with the help of his family, to repay the original principal. Wise Mortgages is owned by Ronald Weisz, an American citizen who was declared bankrupt in the United States and has a conviction in Ireland in the District Court for attempting to get people to deposit money with him. He is also in breach of Central Bank regulations, although the Central Bank advised the person against whom the repossession is being sought that the regulations do not apply to Wise as the company is not licensed by the Central Bank, nor is it subject to the provisions of the consumer protection code.

I have written to the Central Bank about this matter and I am still awaiting a reply. As public representatives, the Minister and I, with every Member of the House, are entitled to a reply to the questions we put to the Central Bank on behalf of a person who is being persecuted by vulture lenders such as Ronald Weisz who, I am told, resides in County Leitrim on an estate he has repossessed.

This is surely a surreal situation. It is also one that needs to be addressed through legislation, as such companies may be considered to be little, if any, better than illegal moneylenders. That is a perfect description of this company. I dealt with Wise Mortgages when I first came into this House. Ronald Weisz, with the help of his cronies in the legal system, terrorised a small farmer not far from where I live and attempted to repossess his land. The farmer borrowed a modest sum, of about €50,000, and Wise Mortgages wanted repayments of €150,000. The initial interest rate was 9% but it rose to 18% when one payment was missed.

There are lenders who ought not to be allowed to lend money. One such company is Wise Finances, the financial company of Ronald Weisz. He has convictions in the United States for fraud and also has a series of judgments against him in the US which led him to file for bankruptcy. He was also taken to court in this country in 1995 for attempting to take in deposits, something he was not licensed to do, and charged and convicted under Section 27 of the Central Bank Act. This led the then Minster, Mary Harney, to attempt in 1999 to tighten up the legislation governing lending but, unfortunately, there are still loopholes which require closing. I hope the Government will legislate in order to deal with companies such as those of the vulture, Ronald Weisz.

It was also claimed during the court case I referred to, that a licence formerly held by Wise Finances in the UK lapsed in May 2004, that the company was not an authorised lender after that date and that it was not regulated by the Central Bank. Despite that, Mr. Weisz signed an affidavit for a court case in September 2004 claiming that the company was an authorised lender, which it was not under the conditions set out by the Central Bank. The current Central Bank regulations on fitness and probity, approved last September, in section 5.2 state that a financial provider must be able to demonstrate that his or her role in a relevant function is not adversely affected to a material degree by the fact that one or more of the following may be applicable: the person is subject to a judgment debt which is unsatisfied either in whole or in part, whether in the State or elsewhere; the person is or has been the subject of a bankruptcy petition whether in the State or elsewhere; or the person has been adjudicated a bankrupt and the bankruptcy is undischarged, whether in the State or elsewhere. That clearly applies to Mr. Weisz and Wise Finances. However, the Central Bank has claimed that those regulations do not apply to Wise Finances as it is not registered with the Bank. In that case, surely the company ought not be allowed operate in the first instance.

Given that this company is currently in the process of attempting to repossess properties, including a farm in the west of Ireland, I would request that the Department of Finance and the Central Bank investigate the legality and status of the company concerned as a matter of urgency. I would also be grateful if the Minister would investigate this matter. He has been involved in unscrupulous money lending operations which have crippled decent and honourable people who were in a vulnerable position and looked to him for money. He continues to operate but he has to be stopped.

A farmer in the west of Ireland who I know personally is facing having his family farm repossessed even though he is making every effort to ensure the money he borrowed is paid back. His extended family is supporting him in this objective.

Michael Kitt (Galway East, Fianna Fail)
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I have no objection to the Deputy mentioning names of companies but it is not precedent to mention the names of people outside the House.

Ciarán Lynch (Cork South Central, Labour)
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I welcome the opportunity to speak on the Personal Insolvency Bill 2012. To set the debate in context, I recall knocking at the door of a house in Douglas in 2006 which was occupied by a couple. The male partner was working in the pharmaceutical industry in Cork Harbour and the female partner was a public servant. They were earning too much to qualify for affordable housing, which cost approximately €250,000 at that time, but too little to purchase a house on the open market. As I walked away from their door that evening I thought something had to give if first time buyers cannot afford to enter a housing market which depends on new buyers. One year later the then Taoiseach, Bertie Ahern, made his famous suicide comment in response to those who warned that something was going wrong in the property sector and, in another context, announced that the boom was getting boomier. We are now dealing with the bang that followed the boom.

The Bill provides a range of workable options for those in mortgage or personal debt distress and presents a real opportunity for our country to recover. Mortgage debt is a dead weight on households throughout the country and will finally be dealt with under the new legislation through personal insolvency arrangements. After meeting certain criteria, struggling homeowners will now be able to enter into arrangements with their lenders to restructure some of their debts. Options will also allow for families and individuals to remain in their own homes or downsize to an alternative home. However, the Bill does not offer blanket debt forgiveness because this would unjustly allow those who will not pay to piggyback on those who cannot.

The Bill also rebalances the relationship between borrower and lender and will ultimately ease pressure on distressed mortgage owners. Banks faced with the prospect of no payments will be incentivised to engage in a meaningful way with borrowers to their mutual long-term benefit. Over time this will help to normalise the mortgage market. I am distinguishing the concept of recovery in the housing market from what we want to see in a normalised housing market. The creation of debt relief certificates will allow for qualifying sums of unsecured debt of up to €20,000 to be written off, subject to three years of supervision. Debt settlement arrangements will also allow for the settlement of larger amounts of unsecured debt over a period of five years. The Bill provides a stick in this regard because banks which do not engage with distressed lenders in a meaningful way will face the threat of the legislation being used against them. The inclusion of secured and unsecured debt through personal insolvency arrangements places Ireland to the forefront of states that are seeking to address the devastating impact of unsustainable debt by providing for settlement arrangements of both types of debt at the same time.

This issue should not, however, be viewed in the context of a single Bill because a range of provisions are being introduced concurrently. The Minister of State at the Department of the Environment, Community and Local Government, Deputy Jan O'Sullivan, is rolling out the mortgage to rent scheme on a national basis to help families find a way out of what would otherwise be an impossible situation. This scheme, which was piloted in February 2012, allows families in severe difficulty to arrange for their home to be bought by a housing authority from the bank at the current market rate. The family can then rent the house completely unknown to neighbours or even loved ones and keep their children involved the local schools, sports clubs and activities that make their house their home and their local area their community. It could also permit families to buy back their homes over time if their economic situation improves.

The Personal Insolvency Bill is a mammoth and complex piece of legislation which runs to 150 pages. It reforms laws that have been in place for over a century and seeks to ensure that better structures are put in place for all families not only those who are in difficulty. The Labour Party has consistently promised to introduce legislation that would assist those who are struggling to pay their mortgages and deal with credit cards and other personal debts. This legislation is delivering on the promise outlined in the programme for Government.

However, it is not a blanket debt forgiveness scheme. It has been put in place for those who are making an honest effort to pay their debts but can no longer afford their repayments. A key principle of the Bill is that it is not about the size of the debt but rather the ability to service it. There is no one size fits all solution and each case will be dealt with on an individual basis. The last administration left behind an appalling legacy which saddled Irish citizens with crippling debts. After 15 years of mismanagement, we finally have radical and workable legislation to deal with the debt crisis. Those who are struggling to pay their debts can make an application through a personal insolvency practitioner who will sit down with borrowers to draw up the best plan for dealing with their debts. Regulations will also be put in place to monitor the various provisions of the legislation.

We must make sure that the mistakes of the past are not repeated. Other measures, including a house price database, are necessary to put an honest and clear valuation on houses. While this legislation seeks to correct the madness of the past we must not forget that Ireland is a home buying nation. We must normalise the housing market by putting in place proper rules for the future so people can once more buy a home without competing in a market where houses are favoured by Government policy as a commodity for investment purposes.