Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank the Ceann Comhairle's office for allowing me to raise this issue. The criticism of the mortgage to rent scheme earlier this week by a High Court judge, Miss Justice Elizabeth Dunne, has prompted me to raise this issue today. Miss Justice Dunne said the scheme was giving false hope and should not be raised in court as an option for borrowers in arrears.

It is seen by many as an indication of the failure to confront adequately the ongoing mortgage arrears crisis. The judge also said that she had read or heard that only one party had availed of the scheme.

The scheme is obviously a very limited measure to address a much larger problem that the Government has consistently failed to get to grips with. Some 218,000 out of 911,000 mortgages are now not being paid on their original terms. Some 11% of those with mortgages are three months in arrears, 5% are six months or more in arrears and approximately 10% are under three months in arrears. The Central Bank issued the figure for those under three months in arrears for the first time in August. It is a social and economic crisis that has been allowed to continue to spiral out of control. The Government received the Keane report more than a year ago and we are still awaiting meaningful action on its recommendations. The recent figures I stated bear out the failure to implement proposals such as split mortgages, shared ownership and now the difficulties and fiasco that arise under this scheme.

The Personal Insolvency Bill lacks the inclusion of an independent arbitrator to ensure that banks co-operate and in the absence of that we feel it will not effectively tackle this crisis. The bottom line is that the Government appears to be failing to provide the leadership required to alleviate the enormous pressure thousands of families face.

This week's criticism of the mortgage-to-rent scheme points to that failure in rising to the challenge of mortgage arrears. In light of that criticism, I wish to ask some questions on the scheme. How many have availed of the mortgage-to-rent scheme? Has it reached the target the Minister of State set when launching it of 100 households benefiting from the scheme initially? Does she still believe that in future years it will be availed of by several thousand households as she originally stated or does she agree with the judge that it should not be brought up as a viable solution to mortgage arrears? If so, how can the criteria be changed in response to this criticism in order to allow it to be an effective tool in the Government's attempts to tackle this crisis?

Jan O'Sullivan (Limerick City, Labour)
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I thank the Deputy for raising the issue. The mortgage-to-rent scheme is a part of the Government's response. I reject his suggestion that the Government is not responding. The Personal Insolvency Bill is proceeding through the Houses of the Oireachtas. The mortgage resolution process in the lending institutions has been set up, as has the advisory service.

My Department is working on the mortgage-to-rent scheme. The Government introduced the scheme on a pilot basis in the spring of this year, with the scheme extended nationwide in June. It targets those low-income families whose mortgage situations are unsustainable and where there is little or no prospect of a significant change in their financial circumstances in the foreseeable future. The aim of the mortgage-to-rent scheme is to ensure that families in such circumstances can remain in the family home, while ownership of the property transfers to an approved housing body which in turn rents it to the original owner. The administration of this scheme requires a collaborative approach between the borrower, lenders, approved housing bodies, the Housing Agency and the local authority sector, with the Housing Agency overseeing the co-ordination of applications. The establishment of processes within these various bodies was effected promptly by all parties and we are beginning to see the fruits of these labours now. It is important to point out that a number of bodies are involved in this and it involves transferring ownership of the home, which is complex.

I will answer some of the Deputy's questions. To date, 546 cases have been submitted to the Housing Agency, of which 188 were ruled out due to ineligibility for various factors. Some 254 cases are being progressed through the system, with a further 96 closed during this process as they were declined by one or more stakeholders. Further information or clarification is being sought in respect of 15 more, while I hope that seven applications will see successful completion imminently - we expect them to go through very quickly.

While I acknowledge that the number of transactions completed to date is low, all of the main lenders and the so-called sub-prime lenders are now fully engaged in the process. It is also important to note that the transition from being a home owner to a social housing tenant is a major one for families. Mortgage to rent, and other such interventions, cannot be rushed. My Department estimates that the overall timeframe per case, from start to finish, will be up to eight months and, as I said, the scheme was only introduced in June. This compares favourably with timeframes in other jurisdictions operating similar schemes.

Recent media reports that cast doubt on the efficacy of the mortgage-to-rent scheme are wide of the mark. It is a new scheme that will deliver a real solution for many hard-pressed low-income families. The process takes a number of months and, as a result, completion figures at this stage do not reflect the volume of work being undertaken or the good results for families whose applications will be finalised over the coming months. The process involving legal transactions takes several months, involving willing participants on both sides. We have now got some traction and, as I said, more than 200 applications are in process. We expect that some of those will cross the line very soon. However, a significant number will become operational next year. It is a real solution for families who are right at the end of their tether in not being able to pay their mortgages and it allows them to stay in the family home, keep children in the local school, etc. It is a good solution for many families.

Barry Cowen (Laois-Offaly, Fianna Fail)
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I thank the Minister of State for her response and her efforts in researching the issue and outlining the various figures she mentioned. One or two things jump out at me. I accept her explanation in the sense that while it was initiated in January, it was merely a pilot scheme that was brought nationwide in June and that there are time issues in getting it placed on the table. Based on the Minister of State's answer, this scheme was recognised as a viable option in 546 cases and those people made an application for it to be a solution to the crisis in which they found themselves. While she said that more than 200 are still going through that process, she said that seven might reach a successful conclusion.

Jan O'Sullivan (Limerick City, Labour)
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Imminently.

Barry Cowen (Laois-Offaly, Fianna Fail)
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Imminently. If that is the case, can she not understand the frustration of the judge who said this week that based on such figures it cannot be mentioned in court as being a viable solution to the problems of those standing before her? We can learn from mistakes. We can learn from decisions that were rushed. We can learn from information being passed on by other Members of the House. The eminent person sitting beside the Minister of State is one of the first I have seen in recent times to put up his hand and admit to mistakes that have been made. I do not mean to be facetious in that comment. That aside, would the Minister of State not revisit the scheme's criteria to look at those who have not been and are not likely to be successful, and why that is the case? Could the scheme be altered so that those applicants could have a solution? I know there is an issue with it being a major decision. However, 546 people looked at it and regarded it as having the potential for offering a solution.

Jan O'Sullivan (Limerick City, Labour)
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We are certainly willing to learn from what is a totally new scheme. Initially officials from my Department worked with individual cases until we rolled out the national scheme in June. Initially, it was mainly the sub-prime lenders that engaged with the process - the main lenders did not want to know much about it at the start. However, they have now all come in and there is definite traction on it. I do not wish to comment on what the judge said. While I do not want to give anybody false hope, I genuinely believe this is an option that will work for certain families who otherwise would be evicted from their homes or would be in a far worse situation than they would be under the mortgage-to-rent scheme.

It is a genuine solution for those families.

I want to see provision in this respect move as quickly as possible for each individual case but it involves lending institutions, individual family decisions, the voluntary housing sector and the local authorities. It is a complex process to transfer the mortgage through the public system to a voluntary housing association which then rent on to the person who originally had the mortgage. It is a complex system. It has been worked out very carefully. To qualify for it, one must qualify for social housing. One's house has to be under a certain value and one has to have reached the end of a mortgage resolution process with one's lending institution. One would have had to try all the options available to make some kind of settlement in paying one's mortgage. It will not work for everybody but it is a solution for people who are genuinely in that desperate situation where they could stand to have move out of what has been their home. I am willing to see if there is any way we can improve the scheme that we have because all of us in this House want to make sure that we find solutions for the families who are in distress.