Aideen Hayden (Labour) | Oireachtas source

Yesterday the Minister for Finance, Deputy Noonan, noted that in circumstances where repossession could possibly occur, the mortgage-to-rent option would in many cases be open to people who are facing the prospect of losing their homes.

I am very concerned by that comment given that by August 2013, only 60 of the 1,332 distressed borrowers who had applied for the mortgage-to-rent scheme had been successful. There is every reason to believe the banks are standing in the way of the success of the scheme as they effectively control whether someone can access it. I ask the Leader to invite the Minister for Finance, Deputy Noonan, to the House to outline how he envisages the position of distressed borrowers will be addressed and engage with Senators on the reasons progress on the mortgage-to-rent scheme has been so slow.

The Minister lauded split mortgages as a potential solution for many distressed borrowers. I would like to question him on the low uptake of the split mortgage option. In my experience, one of the reasons for this has been the lack of clarity about what distressed borrowers are being offered under split mortgage arrangements. Specifically, banks are permitted to engage continuously with the borrower, for example, where he or she secures a little extra overtime or perhaps receives a few bob from a deceased relative. The strategy being adopted by the banks is that they are entitled to take everything when someone secures a little extra income. It is not surprising, therefore, that borrowers are not prepared to engage with the split mortgage option.

I note the Insolvency Service of Ireland is drawing up guidelines on split mortgages in respect of the service it provides under the insolvency arrangements. I understand this document is due for publication very shortly. I call for a debate on the resolutions banks are offering customers. The guidelines the Insolvency Service of Ireland published on reasonable living expenses have been very helpful for those who are engaging with banks on a first level basis.