Aideen Hayden (Labour)

I welcome the opportunity to discuss this very serious Fianna Fáil Bill. It is fitting that this is the last debate in the House before the recess. In a previous debate, we outlined on a number of occasions the serious issues that affect those facing negative equity and, more important, the inability to repay their mortgages. We sometimes forget the realities and the facts. The reality is that 80,000 people with mortgages have renegotiated. Of those 80,000, 40% have non-performing loans. We are facing a very significant difficulty in the housing market; there are no two ways about that.

That the market is currently non-existent is an issue for the country as a whole. It is a zombie market. Until we draw a floor under mortgage repossessions, we will never return to what could even remotely be called an active market. I very much believe we need measures to resolve the current problem. I welcome the opportunity our colleagues have given us to debate this issue.

As colleagues are aware, we put forward other proposals for the Government. It has acceded to considering the issue of mortgage arrears. We have asked the Government to examine mortgage-to-shared-equity schemes and mortgage-to-rent schemes. These proposals will be considered seriously by the Government.

I accept the points made by our colleagues. The Bill represents a serious attempt on their part to make progress on mortgage debt. Unfortunately, however, I have reservations. The Bill is too focused on a judicial solution to what is not necessarily a judicial problem. Largely removing responsibility from the judicial system would be in the best interest of distressed mortgage holders.

I am concerned about the decision of Ms Justice Elizabeth Dunne. There are six references to the Land and Conveyancing Law Reform Act 2009 in the Bill. On that basis alone, it makes it significantly flawed.

The Bill focuses very much on extending the period within which people can reside in the family home within the context of finding a final solution. Unfortunately, evidence from the United Kingdom and elsewhere shows that when people cannot pay, extending ad infinitum the potential for them to remain in their existing circumstances is actually damaging to their long-term prospects. What is needed is a mechanism to draw a line in the sand by way of achieving a final resolution. In that context, the Bill's dependence on MABS is a flaw. MABS is not a statutory body, nor is it a body capable of reaching a final applicable settlement. It does not have the necessary statutory powers. If one refers to the programme for Government, which was agreed by both parties in government, one will note MABS is being converted into a personal debt management agency with strong legal powers and the capacity to reach settlements. This is a necessary prerequisite to what is being proposed in this Bill. I am not suggesting what is proposed is not without merit but that a number of prerequisites need to be realised before the Bill could have the teeth I believe its advocates would like it to have.

Section 6 considers alternatives to an order for possession. Unfortunately, I am not convinced that Fianna Fáil's advices on the constitutionality of the provisions are necessarily robust. We probably need more opportunity to flesh out this aspect of the matter. There is a danger in the sense that many mortgages were negotiated with the assistance of mortgage brokers. This presents an issue for the average mortgagor in that attestations were signed relating to their incomes. Perhaps an unforeseen consequence of what is being proposed in the Bill would be that borrowers would be made liable or, under section 7, guilty of committing fraud. I refer to the way in which many mortgages were negotiated during the Celtic tiger years. While the proponents of the Bill have the best of intentions, I, as a practising solicitor, am well aware that the realities of what happened on the ground may not be best reflected in the provisions of the Bill.

The commitment to considering the matter further within Government through an interdepartmental group will result in far more information and far greater clarity regarding the way in which Government thinking is developing. The group is due to report in September of this year. I would very much like if it were possible to re-present this Bill along the lines of the group's proposals based on there being greater clarity on the legal position. As a new Senator, I am not sure if it is possible. I commend my colleagues on their genuine and sincere efforts to resolve in the House the problems of distressed homeowners.