Aideen Hayden (Labour) | Oireachtas source

I have great sympathy with the amendment proposed by our colleagues and I welcome a full debate on it on Report Stage. There is considerable concern over the veto banks and lenders have both in the insolvency legislation and in the mortgage arrears resolution process. For example, in the updated MARP, a tracker mortgage may be withdrawn when a bank has made a proposal that it considers to be reasonable and affordable to the borrower. The determination as to what is reasonable and affordable rests with the lender and there is no independent arbitrator to determine whether an offer that has been made is reasonable and affordable.

As somebody who has worked for many years in the area of housing, I am well aware that we have been hearing a very distinct change in the rhetoric from the banks in recent months. It is an aggressive rhetoric that is epitomised by the observations of the CEO of Ulster Bank when talking about the category of borrowers he determines as "those who won't pay". None of us would stand over those borrowers who will not pay. However, from my personal experience, I have no doubt that the proportion that is suggested as in the category of "won't pay" is a gross exaggeration of what is happening in the real world. I have a very serious concern over the lack of an independent arbitrator, ombudsman or some mechanism either through the courts system or the creation of an independent body. To give the kind of confidence that people deserve to have in the process and to restore confidence in the banks and the legal system, there must be some recourse to the courts or to an independent ombudsman. I do not believe the final decision should rest with a lending institution.

On many occasions I have congratulated the Minister on introducing the personal insolvency legislation. Having listened to him on many occasions, I know he believes that the existence of the personal insolvency legislation will encourage banks to behave in a reasonable fashion in order to avoid persons entering into the personal insolvency process. However, as he knows, a person wishing to avail of the insolvency process must demonstrate that he or she has co-operated with the MARP. The determination of whether someone has co-operated rests with the lending institution.

I reiterate that far too much power rests with the lending institutions. Section 2 of the Bill before us provides that the court can determine whether a mortgagor has participated. That is the kind of change I would like to see permeated through all the provisions relating to mortgage debt.

My colleague mentioned the importance of the principal family home. I have made this point on a number of occasions and it is worth making again. The Governor of the Central Bank, Professor Honohan, has indicated that he does not foresee many principal private residences being repossessed. However, one in five families is living in a rented home and in Dublin it is one in three. There is a very significant cohort, 30,000, where mortgages are in arrears. Families in those homes stand to have their homes repossessed through the process without any MARP or other safeguards being put in place for those families.