Wednesday, 26 February 2014
IBRC Mortgage Loan Book
I welcome the Minister of State. I have just spent the past two and half hours discussing the sale of the Irish Nationwide loan book via the IBRC at the meeting of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. We are talking about 13,000 mortgages. We need to step back from the issue and say, as the Minister of State and I know, that property rights are deeply ingrained in the psyche of Irish people. One hundred years ago we had absentee landlords and now we are about to be sold-off again - and some might say by necessity - to absentee landlords. The very least that we must do is to protect and respect the Irish homeowner. In the Constitution property rights are ranked second highest, right after the right to life, and I am up there with my support of those rights.
I ask the Minister of State to ask the Minister for Finance to ensure that Irish homeowners are given the first right of refusal and a window of time to buy back their loans, if they so wish. At the meeting earlier we heard from the special liquidator who said that 10% of the 13,000 people wanted to buy back their loans. That means that 1,300 Irish people want the right to buy back their own home loans and perhaps set up a new mortgage with another Irish bank or institution. It is only fair and right that they are given the opportunity.
We also learned, at the meeting, that some of those Irish people who have home loans are prepared to offer more to the Irish Nationwide and the IBRC than a foreign bidder will give. That will not do the State creditor any good because the State and NAMA own more than 70% of the loan book. In light of what we have learned today, I ask him and the Minister to think seriously about giving a window of time to the Irish person, the Irish homeowner, the mother, father or individual, who wants to buy back their home loan. We have heard that it will take another two months before the deal is completed. Please give them all at least a month because we all know that it will take a bit of time to qualify, etc.
If people do not wish to buy back their home loan then we need to know home loans that sold to a foreign bidder have the protection of Irish law and practice, including the code of conduct on mortgage arrears. Last night we learned, and we learned again today from the special liquidator, that the code is voluntary. That is still progress but it is not written on paper. We often use the phrase "it is not worth the paper it is written on". However, the code is in word only and is not written on paper. The code is an act of goodwill but the Minister of State, who is a very wise man, will know that it is valueless. It needs a statutory basis which I shall deal with. Mr. Edmund Honohan, the Master of the High Court, has said that the green fields of Ireland will change hands and the secondary market for mortgages will grow. Plus, Ireland needs to regulate for a secondary mortgage market and recognise that mortgages will be bought and sold abroad.
Earlier in the committee room Ms Ann Nolan, from the Department of Finance, said that the Minister was looking at legislation. That is great but this matter is so urgent that we must consider introducing emergency legislation so that none of the 13,000 people involved will be subject to abuse, higher surcharges, higher interest rates, etc. than they would have had to pay here.
The Minister of State will know that the Ulster Bank is in trouble and is looking at selling out here next year. That is only the beginning. Mr. Honohan said: "The need for legislation was broader than the Irish Nationwide problem. Securitised and judgment mortgagees are not regulated by the Central Bank or covered by any consumer code." Therefore, we need to get on with the business of regulating and protecting all homeowners. Those are my two requests and I look forward to hearing the Minister of State's answer.