Kathryn Reilly (Sinn Fein)

Sinn Féin welcomes this motion. Every Member recognises the problems facing homeowners today. Circumstances have deteriorated further since the motion was published. The Central Statistics Office reported that house prices continued to fall this month by 1.2%, by comparison with 1% in April. There was a fall of 12.2% over the year. There seems to be no end to the decline in property prices and to increases in negative equity. The ESRI suggested some time ago the properties bought in and around the peak of the boom will realise their mortgage values by 2030, but this is now seriously open to question given that a generation has already been condemned to negative equity.

Of immediate concern is the number of families facing mortgage distress. The latest figures indicate that 86,271 mortgage holders are classified as being in serious distress. This includes defaulted and re-negotiated mortgages. Therefore, in excess of 11% of all mortgage holders are in difficulty. This represents an increase of 6,000 in the first three months of 2011, which implies 500 families are falling into serious mortgage distress every week. Some 500 additional families, therefore, have been forced to default on mortgage payments to pay for food, heat and other expenses. This is a choice we should not have to place at the door of citizens.

While the number experiencing distress is increasing, the crisis is deepening. Some 49,609 mortgages are in arrears for more than 12 weeks and, of these, 35,000 have been in arrears for more than 24 weeks. As other contributors have stated, we must look beyond these figures and at the reality experienced by the individuals, families and communities behind them. We need to consider the plight of individuals and families suffering within communities who took out loans in good faith and with the support of the Government. Families are now struggling to pay back inflated mortgages for properties worth only a faction of those values. This is a national emergency and the lack of action to date is a disgrace.

If we compare the circumstances of mortgage holders to those banks and unsecured bondholders, we will note a stark contrast. Four weeks ago, with Government consent, AIB paid €200 million to unsecured, unguaranteed bondholders, a sum well in excess of that set aside for job creation. Last week in New York, the Minister for Finance, Deputy Michael Noonan, threw some shapes in respect of the bondholders of Anglo Irish Bank and Irish Nationwide. We welcome this initiative and hope burden-sharing will become a reality and not just remain the subject of rhetoric. When the Minister returned to Dublin a few days later, he and the Taoiseach ruled out of a similar approach for other banks.

The value of unsecured, unguaranteed bonds in the other banks is €13 billion. The current value of all distressed mortgages is estimated to be €12.5 billion. The value of the unsecured, unguaranteed bonds could completely clear the mortgages of the 86,000 families in distress. Such is the scale of the money going to the bondholders. While this money is been handed over and the banks' debts are being honoured, negative equity mounts and the number of families in mortgage distress increases. We need to ensure the Government's definition of burden sharing does not mean rewarding the bankers or banks while a generation is condemned to debt. To many families throughout the State, the priorities of the Government come across as being the bondholders and not the householders.

We have to examine the Government's capacity to end this madness and bring some relief to families facing real distress. The approach taken to date has been to kick the problem into the future, for example, through promoting the rescheduling of debt whether through moratoria or interest-only payment schemes. While this does provide some short-term relief for those in mortgage distress, it will not provide a long-term solution. We must reflect again that this issue is not a housing problem. It has wider implications for the economy and society. It impacts on consumer spending and it puts growth at risk.

There is an opinion that the Government is continuing the failed pretence that this debt burden is sustainable while it is introducing additional costs on families and targeting the wages of the lower paid. We must consider this against the backdrop of the ECB interest rate hikes coming next month. We need to change this. We need to break the cycle of debt, austerity, reduced growth and increased mortgage distress.

Sinn Féin supports the concerns of the proposers of the motion but it falls short in some areas. It proposes that the Government, comprising Fine Gael and the Labour Party, should consider doing something on the issue but time is too short for the 500 new families moving into mortgage distress every week. We need the Government parties to commit to acting. Similar to Fianna Fáil, Sinn Féin will launch proposals for tackling mortgage distress.

We need further public policy debate on this issue to explore seriously negotiated loss-sharing involving mortgage holders, mortgage lenders and, crucially, wholesale funding markets. This will require legislation and I urge the Government to bring forward proposals prior to the summer recess to address this problem. Failure to act now will mean that thousands more families will fall into arrears and possibly lose their homes. The broader costs to the economy will skyrocket and action needs to be taken. The sad reality is that the choice being faced by some families is between food and a roof over their heads and this is not a choice we should put before the people of the State.