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

3. To ask the Minister for Finance the steps he is taking to protect mortgage prisoners from extortionately high mortgage interest rates; and if he will make a statement on the matter. [16503/25]

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

The scandal of selling off mortgages to vulture funds has never been addressed. Just this week, the Financial Services and Pensions Ombudsman, FSPO, legislation passing through the Seanad is finally giving people access to the financial ombudsman. That was only one of the many promises that mortgage holders would be treated the same that was broken. What steps is the Minister going to take to protect mortgage prisoners from extortionately high mortgage interest rates? We know they are being fleeced by the vulture funds. The Minister promised, along with others, that there would be no difference if their loans were sold on to mortgage funds. What an empty promise when we now see so many people paying extortionate interest rates in the hands of these vulture funds.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am, of course, very aware of the difficulties the increase in interest rates in recent years has caused to many mortgage borrowers. From a regulatory perspective, the Central Bank has put in place a range of measures to protect consumers who have or who are taking out a mortgage. The consumer protection framework, which applies in the same way to all regulated mortgage entities such as banks, retail credit firms and credit servicing firms, seeks to ensure that lenders are transparent and fair in all their dealings with borrowers.

Specifically with regard to variable rate mortgage holders, the Central Bank's consumer protection code requires all regulated mortgage creditors to explain to borrowers how their non-tracker variable interest rates have been set and to clearly identify the factors which may result in changes to variable interest rates. In this context, the Central Bank is continuing to update its consumer protection framework, and Deputies will be aware that it launched an enhanced consumer protection code this week which, following an implementation period, will come into effect next year.

The Central Bank has also engaged intensively with regulated firms on the operation of specific aspects of the consumer protection framework to make sure there is capacity in place to: manage applications by borrowers to switch their mortgage or mortgage provider; ensure there is no discrimination against borrowers based on where they currently hold their mortgage; ensure changes in mortgage interest rates are in line with mortgage terms and conditions; and have supports available to borrowers in or facing arrears.

Also, a number of measures were introduced by industry in 2023 to support borrowers who wish and are in a position to switch their mortgage. This included the provision of an aligned industry-wide set of initial eligibility criteria to facilitate people who are switching their mortgage from a non-bank to a bank.

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

That is all cold comfort to people who are mortgage prisoners. The Minister was one of the cheerleaders who cheered this on and told them all there would be no difference and that it would be no problem whatsoever and they would have the same protections. However, he failed to deal with the main issue we are addressing.

There are 7,000 mortgages holders that are now being charged over 8.5% with the vulture funds. There are 100,000 mortgage holders who saw their interest rate go up over 6% last year. To give a bit of context, if somebody has a mortgage of €300,000 and is paying 6%, he or she is paying €1,800 per month, which is over €6,000 more than somebody with a high street lender fixing at just over 3%. That is €6,000 more out of people's pockets. If someone is one of the 7,000 who is being charged 8.5%, he or she is paying €12,000 more because his or her loan was sold to a vulture fund. We know that during that time, Fine Gael and Fianna Fáil sold the Irish people a fairy tale, telling them that they would be no worse off. The reality is that these mortgage prisoners are worse off, and they need a way back to normal banks. They cannot switch because some of them are in arrears or have been in arrears in the past. Has the Minister anything to say with regard to providing a pathway back for these people so that we have normal lending rates as opposed to what is now happening with rates of 8.5% and 6% and with over 100,000 mortgages in that position?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have three points in response to that, the first of which is that the best prospect we have to see all mortgage holders pay lower interest on their loans in the time ahead is to see a change in general interest rates within our economy. I welcome the decisions that have been made in recent months by the European Central Bank, ECB, in that regard.

Second, I emphasised at all times during this very difficult period for those who had their mortgages sold on that their rights from a legal point of view would not be affected. That is the case. I outlined that in my answer.

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

That was not the case.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Third, what we have seen is some switching take place and I, of course, want to look at how we can see further switching take place from the non-bank back to the bank sector.

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

First of all, that is not true. It was not the case. On vulture funds, until last week those people were not able to even go to the Financial Services and Pensions Ombudsman, a legal provision that everybody else had until I pointed it out to the Minister and forced that to be changed.

The Minister said he would not mind if his mortgage was sold to the vulture funds. He made that statement to try to guarantee or give comfort to people that everything would be okay. I put it to him that there are 7,000 homeowners who are being charged an interest rate of over 8.5%. There are 100,000 homeowners who are being charged an interest rate of over 6%. They are all with the vulture funds. Why did this happen? Because the Minister, and Fine Gael and Fianna Fáil, allowed this to happen. They blocked legislation that would stop this happening. They told people they would not be better off. The Minister should talk to the family that has now been paying €12,000 more per year on their mortgage because that loan was sold off to a vulture fund. That is the change. That is the difficulty. To tell them they have the same rights and entitlements is not the issue here. The are being screwed royally by these vulture funds, and the question is: what is the Government going to do? Is it going to continue to sit back and allow tens of thousands of Irish consumers to be fleeced in this way?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I always acknowledge, and will do so again, that it was difficult and there were moments of high anxiety for those who saw the ownership of their loans or the mortgage on their homes or properties switching. I know that the impact on those affected has been difficult. For many, it has resulted in their mortgage payments and their interest rates being high.

At the same time, I must be honest in emphasising what I can and cannot do. What I can do is look at the changes that have been made in the consumer protection framework to ensure there are rights in place and levels of protection are available. I have outlined that to the Dáil. What I could not do was intervene to block decisions banks were making. Had I done so, it would have had other consequences for our banks and their ability to lend, contribute to our economy and, in turn, support others who wish to access mortgages and loans.