Tuesday, 15 May 2012
Mortgage Arrears: Statements, Questions and Answers
Brian Hayes (Dublin South West, Fine Gael)
I thank colleagues for their contribution on this crucial issue for the country. The Government is mindful of the significant issues we face and our responsibility to deliver a coherent reply and response to this problem. No one is suggesting in this debate that there is some kind of magic one-size-fits-all solution to this problem. We know that and the Senators know that. I sense from colleagues on all sides a growing frustration about the pace of change and the pace of the reform agenda that we clearly want to implement and support. That frustration is also shared in government. If there were a means to magic away this problem by some immediate solution, there would be a solution. The difficulty is that the problem is multifaceted. I reassure the House that this is a number one priority for Government. In my limited time in government, and it is very limited in terms of inexperience compared to other people in this House, when the Taoiseach and the Tánaiste of the day set up a specific committee to drive a policy such as this, it sends out a clear signal to all arms and wings of Government in all its various guises that the Government regards this issue as a priority. The establishment of that committee under the Taoiseach has given that jolt, if it was needed, to the entire aspect of Government to come up to the plate, resolve this issue and bring forward the necessary proposals that we need to see put in place. I assure the House that the Cabinet sub-committee under the Taoiseach is prioritising this issue and making sure that we make progress.
We have the Keane report. I heard someone suggest it took eight months to complete when in fact it took, from start to finish, eight weeks to put in place. The draft heads of the personal insolvency legislation were published in January. That was also a priority concern for the Government and we are making progress on it as well. If one considers the individual plans the banks will bring forward, I have made a commitment to the House - as is the case through the Central Bank comments on this issue - that by the end of this month those specific plans and the options they will then make available to borrowers in the second half of this year will be in place. We will see a significant range and variety of options. As colleagues on all sides have said, no two cases are the same; there are a variety of options that need to be put into the field. We will see significant progress there.
The Government is clear about the fact that when the Blackrock Solutions assessment of the capital requirements for our banks was done following the latest range of capitalisation in March of last year, it was made abundantly clear that a figure of €10 billion was set aside for the purposes of the banks writing down and writing off specific loans that were required. We have not seen as of yet substantial movement by the banks in that regard. That is wholly frustrating for us all. However, I believe we will begin to see that process in place and a more concentrated approach by the banks once the range of options are in place. We will see progress on the options that need to be put in place in the second half of this year.
Significant comments have been made about the role of the advisers the Government will put into the field, as it were. I understand that by June at the latest the Minister for Social Protection will make announcements in that regard. The objective of those advisers being in place is that we need to have an independent third party assessment following a borrower and lender discussion through the market process. In other words, if borrowers and lenders engage honestly and openly with each other and a solution is arrived at and if lenders believe that solution is unfair in regard to the conditions being put in place, the objective of having the role of such advisers - we do not need to be caught up about agencies - is that we need to hear specific people with specific skills and experience in this area who, on behalf of us all, can give a third party assessment as to whether that solution is fair. That has been the entire objective of Government here. I fully accept what people have said. Up to now there has not been any independent role in this respect. The banks produced a solution and one like it or lumped it, as it were; one could effectively appeal it, but one would appeal it to an internal committee of the bank. That is not acceptable. My understanding is that new advisers who will be established under the office of the Minister, Deputy Burton, will give that third party advice which will ask the banks and those lenders to arrive at a solution that is as fair and equitable as possible in the circumstances that have arisen.
I would ask people to be patient with us. The Senators rightly pointed to the degree of frustration that has been encountered so far. I readily identify and admit that but I point out that a good deal has happened in a relatively short period. The objective of Government, across all agencies and Departments, is to make sure that we can make significant progress in the time ahead.
We acknowledge that the mortgage to rent scheme will have a limited but important impact on the mortgage arrears numbers but other solutions such as the trade down mortgages or slit mortgages operated by the banks under the oversight of the Central Bank will have an important role in regard to distressed borrowers. These are solutions but I refer to what I said at the outset of my speech that what is ultimately required in the Irish economy is a period of stability and growth when we can see some activity and transactions in the housing market again. I refer again to the fact that the Government has put a number of measures in place under the most recent budget to encourage the number of transactions to improve the housing market. Unless we see that we will not see an ultimate solution to the general position in the economy.
Senator O'Brien raised the issue of a separate agency to deal with the mortgage issue. A separate agency to deal with the mortgage debt problem would complicate the system and would give rise to significant concerns on the part of investors that blanket debt write-off is envisaged. The objective of having these advisers - this is an area for the Minister, Deputy Burton - is that they would be that third party eyes and ears, as it were, in trying to arrive at a fair solution for people. We must be more concerned here about the advice and the expertise of people and less concerned about the process of agency. The point has been made that there is a distinct difference between the role of MABS and the role that is envisaged for the advisers when they are in place.