Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

53. To ask the Minister for Finance if he has engaged with mortgage lenders with respect to forbearance measures and solutions in place for mortgage holders where their loan is with respect to, and secured against a property affected by defective concrete blocks; his views regarding the need for a coordinated approach among lenders with respect to such mortgage loans; and if he will make a statement on the matter. [21748/23]

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

There are many issues for those whose homes have defective blocks in my county of Donegal and right down the west coast. However, tonight I want to focus on one part of it which is the issue of the banks, mortgages and access to finance. Because of the scheme brought forward by the Government, all families are left with a significant shortfall in rebuilding their homes and rebuilding their lives. Despite this, they are trying their best under the scheme. In some cases, their homes have been knocked down and are now rubble. The banks are charging for the full mortgage. There is no relief whatsoever despite there being a condition in their mortgage contract that they need approval from the banks to demolish their house. They also have serious issues with bridging finance because of the way the scheme was developed with a retention of a portion of the grant at each stage which means they have to go to family, parents or the credit union to get an unsecured loan with interest of up to 12%.

What has been foisted on these families is absolutely appalling. They should never be contractors trying to build their own homes and manage these projects. What engagement has the Minister had with the banks? What engagement has he had with the Central Bank on the matter? We need everybody around the table. It should not be left up to the homeowners. We need support and we need action. It is not fair. If the Minister sat down with them, he would find that their hearts are broken, their houses are in rubble and they have serious issues with finances. What is happening is just heartbreaking.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I thank the Deputy for raising this issue. I fully empathise with the terrible plight of those homeowners who are dealing with the devastation that mica has caused to their homes. I will do all that I can while I am in this office to help them and to support them.

The Government response to the mica issue is led by my colleague the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien. As the Deputy is aware, a scheme of financial support to help affected homeowners has been put in place.

Regarding financial institutions that provide mortgages to help people to buy or build their own home, as the Deputy is aware, the Central Bank is responsible for the regulation and supervision of financial institutions in terms of consumer protection and prudential requirements. Through its consumer protection role, the Central Bank sets out requirements in its codes of conduct which detail how regulated firms such as banks should deal with and treat their customers.

In particular, the code of conduct on mortgage arrears, CCMA, places a requirement on regulated entities to have fair and transparent processes in place to deal with borrowers who are in, or are facing, arrears on a mortgage secured on a primary residence. It sets out the process that entities must follow in such cases. The CCMA sets out a standardised mortgage arrears resolution process that all regulated entities must follow, which entails communicating with the borrower, gathering relevant financial information, assessing the borrower’s circumstances and proposing a resolution.

Due regard must be given to the fact that each case is unique - many of these cases are certainly unique - and needs to be considered on its own merits. All cases must be handled sympathetically and positively by the regulated entity, with the objective at all times of assisting the borrower to meet his or her mortgage obligations. That must apply in these cases more than any other.

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The Minister said he would do all in his power. I will give him an idea of what should happen. I have been meeting with the Central Bank for some months to discuss the matter. I have met with the banking industry more recently on the matter. The Minister should call in people from the mica group who are on its subcommittee which deals with finance and insurance. They have become experts on this. Some of those who are involved have actually had their houses demolished and are going through the scheme. The next day he should call in representatives of the Central Bank and the heads of all the banks to get their heads together to figure out how we can support these families.

The asset values of these homes are on the floor because they are riddled with mica. These properties could not be sold and yet because of these schemes and because the families themselves also have to contribute, the asset values will be restored and the banks are doing nothing. In one case where the house is demolished to rubble and the individual had to go to a credit union to get bridging finance because the grant is not there and there is also an issue with retention, the only thing the bank will do is give them a payment break where interest continues to accrue. What is going on is absolutely scandalous. Developers are now saying this is not for them. They are walking away from this. It is too complicated and they cannot be sure of their funding.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

To be straight with the Deputy, I have no problem whatsoever in meeting the group and I am sure the Minister of State, Deputy Carroll MacNeill, will do the same on the insurance issues. Perhaps we can meet them together. These are genuine issues. These homeowners should not be in this situation and the banks need to adopt a supportive role when it comes to helping them because there will be issues. As the Deputy rightly said, the asset values are greatly reduced. They will need help in the journey to reconstructing or remediating their homes - issues will arise there. As the Deputy said, I know the Banking & Payments Federation Ireland, BPFI, is in correspondence with the mica group. My understanding is that it will put in place a process of structured dialogue with the mica group as well. I am sure I can speak for the Minister of State, Deputy Carroll MacNeill, in saying that we will be happy to jointly meet with the group to discuss banking and insurance issues to see if we can help to support them to work through the issues that will continue for a number of years.

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I met representatives of the BPFI and I put that directly to them. In fairness they did not hesitate in saying that they would organise that structural engagement with its members which is to be welcomed. However, there is also a role for the State here. Why are these families in this situation? It is because the Government scheme does not provide 100% redress. It is because people are expected to put their hands in their pockets to find the €60,000 or €70,000 themselves. These families are paying a full mortgage with interest on rubble at this stage. They then need to find bridging finance because the Government has not come up with 100%.

There is a problem for the banks with the mortgage terms and conditions because people cannot demolish their home without the bank giving consent to it. For banks to give consent to it, they will need to be assured that the home can be rebuilt because they have a loan and there are issues with how they represent the collateral of that loan in their balance sheet. Up to 7,000 of these homes could be in this situation. This is not a small issue; this is a very big issue.

I will say this again. We have been raising the issue of the banks for a long time now. This is us trying to deal with the disaster that is being foisted upon these families by not having 100% redress - we have not given up the battle on that. The issue here is that nobody is doing anything about it. The banks have not done anything about it. The Central Bank has not done anything about it. Neither the Department of Finance nor the Department of Housing, Local Government and Heritage has done anything about it. The houses are on the ground. Some of them are demolished. People are at their wits' end and developers are walking off. That is what is happening here. We need to get to grips with this very fast.

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I assure the Deputy there is no lack of will on my part to support these homeowners on these issues. The scheme itself has been established by the Minister. The legislation has been put in place and this has to be worked through. The Deputy has raised specific issues around the treatment of people in the context of their mortgages, the difficulties that are already there, and the difficulties that can be anticipated as they remediate or completely reconstruct their homes. I acknowledge that practical issues will arise and the banks and the insurance companies are very important stakeholders in this regard. They have a role to play to make sure these homeowners are supported in every practical way possible. If I can use the weight of my office to assist in that regard, then I will do so in the best way I can.