Catherine Noone (Fine Gael) | Oireachtas source

The motion as tabled is important in many ways as it seeks that we would ultimately recognise the mortgage arrears problem, which I believe we all recognise. Much of this has already been dealt with by the Government and, while I do not necessarily agree with the idea of having a motion on the topic, it does allow us to discuss the matter. We all acknowledge there is a way to go on this issue and that it is very much an area in flux.

On mortgage arrears, the Government policy has four strands, namely, the resolution strategy, the Personal Insolvency Act, advice services and the mortgage-to-rent scheme. In reference to the first point, it is worth noting that the rate at which mortgages are falling into arrears by more than 90 days and the number of early arrears cases under 90 days have both reduced, although I accept this is only a small sign of positivity in a very negative space. There is no question the numbers are stark and there is no taking from everything that has been said about it already in the House. Some 94,500 are in mortgage arrears for more than 90 days, with over 23,000 in arrears of more than 720 days. The gravity of the situation is certainly acknowledged by all sides of the debate.

I have concerns with regard to the banks and would echo some of the concerns expressed on both sides of the House when it comes to how the banks are actually handling people who are in arrears. People spoke of advice and expertise. It strikes me that not only is the advice at the level required by borrowers not available but, while the banks might be coming up to speed with their internal expertise, it simply has not been available in the recent past. There is an onus on the banks to improve their own situation in this regard.

We must do more than hope if there are no signs of some improvement on this front. We must hope there will be a vast improvement in this area. I agree with Senator Hayden's point when it comes to resources and expertise. The case-by-case basis is very unsatisfactory. The fact that banks can keep the decision makers away from the person dealing with the individual client is very frustrating for people in mortgage arrears. They are listening to somebody who has no say in the matter tell them that they will talk to a particular head office and various people in the bank who have no face as far as the borrower is concerned.

The Central Bank recently published a series of measurable, timed goals for the six main banks which will ensure specific, measured progress towards the objective of increasing engagement with borrowers in arrears. I welcome the targets outlined and the fact that targets exist. The target that by the end of June 2013, banks should have proposed sustainable mortgage solutions for 20% of distressed borrowers is a tangible target that we must welcome. We must ensure these targets are met by the banks. It is important that we work to ensure that there is a framework within which banks must work. Citizens going bankrupt is not a useful solution for banks, the country or citizens. From the Central Bank's perspective, the main point is to ensure that banks are actively in dialogue with their customers who are in trouble and to come to an acceptable solution.

It is with that same rationale in mind that the Government put together the Personal Insolvency Act. While some may criticise it and it has been criticised here today, it will be legislation over the banks' ability to veto any proposed solution. Ultimately, the banks are incentivised to properly engage in the process because the Act makes bankruptcy a feasible alternative by reducing the period of bankruptcy from 12 years to three. If the banks do not make an agreement under the Act, a mortgage holder could end up in bankruptcy, which would worsen the financial position of the bank overall.

The third strand of the Government's mortgage arrears policy is advice. I agree that more needs to be done in this area. I have already alluded to this but distressed mortgage holders offered long-term restructuring by their lenders can avail of free independent financial advice. I am hearing in dispatches and from people with whom I have spoken that the quality of this advice is not of the level that it should be. The Government acknowledges the great difficulty that mortgage arrears pose for families across the country. This situation is in flux and the Government is introducing targets and various measures. I hope the Government will not take any nonsense from the banks when it comes to the targets that have been implemented. We have taken enough nonsense from the banks. "Targets" is my favourite word this evening but I hope that while the expertise was not in banks and there was not as much of a structure as has been introduced now, we will not take any further nonsense from the banks when it comes to mortgage arrears.