David Cullinane (Sinn Fein) | Oireachtas source

I do not get my information from the dispatches. I get it from ordinary families who arrive in my constituency office every week in ever-growing numbers. These are people who cannot afford to pay their mortgages and are in mortgage distress. It is very clear to those families that this Government does not fully understand the depth of the mortgage distress crisis in this State. The numbers speak for themselves. A total of 180,000 families are in mortgage distress. This is twice the amount in mortgage distress since this Government came into office. Of this figure of 180,000, 140,000 cannot pay their mortgage now or in the future. We know that 1,000 families fall into mortgage distress every month. Many of them cannot pay their mortgages for long periods of time.

Going hand in hand with that is the lack of any cohesive intervention, measures or policies from this Government to support people in mortgage distress. This is despite the fact that the taxpayers of this country put billions of euro into the banks, particularly the pillar banks. Over €90 billion of taxpayers' money in some form has been put into the banks - €30 billion for write-down on the NAMA loans, €30 billion to recapitalise the banks and €30 billion in respect of the Anglo promissory note. Of the €30 billion that was put into the pillar banks, the Government put €18 billion into those banks. A total of €10 billion of the overall money that was put into pillar banks was to be used to offset losses in the domestic mortgage sector. As the Minister knows, rigorous stress testing was carried out and the banks came back and told the Government how much money they needed to have strong capital ratios and to be able to deal with the losses in both the commercial and domestic markets. A total of €10 billion was provided for to deal with losses in the domestic mortgage situation.

However, the banks are doing nothing to help people in mortgage distress. This Government is doing next to nothing either. It is allowing the banks to have a veto and full control. Every week, I and I am sure other Senators get copies of correspondence from banks saying that they will not engage with mortgage-to-rent arrangements, split mortgages or any of the so-called interventions that are there. I can provide the Minister with any number of letters from banks which advise people to sell. That is what the banks are saying. They are telling people to sell their houses and pay back the balance. The Government does not seem to realise that there will be some level of write-down. It is inevitable because if the banks force people to sell or repossess those homes, and we are talking about family homes, the banks must sell those properties at a reduced price, probably a fire sale. If this happens the banks will only get a fraction of what they are worth, will not get all their money, will land those families in debt and leave them without a house, and will still have taken a loss. There needs to be an imaginative response.

We have proposed an independent mortgage resolution body. We want to see a fair solution and a mortgage restructuring panel set up independently to look at each mortgage situation on a case-by-case basis. To respond to criticisms of our position that it should be done on a case-by-case basis, every case is different. Everyone's family and income circumstances are different. The size and location of people's homes and the opportunities they may have in the future differ. We want to allow the independent body to impose a fair solution that would look at the suite of interventions that are there, be they split mortgages or mortgage-to-rent. It may involve some level of write-down but the panel could look at what is the best fix for everybody - the taxpayer and the family - and impose that solution rather than allowing the banks to have the veto they have at the moment. That is all we are trying to achieve.

It is quite obvious that if the Minister and Government do not act, the situation will get worse. Aside from the impact that will have on all those families in mortgage distress, the simple reality is that as long as families are trying to pay a mortgage they simply cannot pay and their debt is unsustainable, people will not have money to spend in the domestic economy. If the vast majority of families are servicing debt, they do not have money to spend and it exacerbates the problem we have in our domestic economy. The Minister needs to act, put an independent body in place and impose fair solutions. Keeping the family home must be at the heart of that.

There must be some level of write down, but it is crucial to remove the veto from the banks and enable an independent body to impose fair solutions to ensure people remain in the family home.