Darragh O'Brien (Fianna Fail) | Oireachtas source

There is a real issue. We have 11 or 12 amendments on the Bill that we will table. I do not doubt the Government's desire to afford protection to mortgage holders but I believe the legislation needs to be strengthened sufficiently.

The Minister of State referred to the question of why loan books are sold. We understand why they are sold. Mortgage holders wonder, in connection with the IBRC and Irish Nationwide book of residential mortgages that was sold, why the affected mortgage holders were not afforded the opportunity to purchase their own mortgages at a discount. The Government saw fit to sell those mortgages as a block at a substantial discount, yet the mortgage holders, even if not in arrears, got no opportunity to make an offer on their mortgages. My proposal might not seem realistic but I have dealt with people with Irish Nationwide and IBRC mortgages who were angry because their mortgages were sold by the Government to what is effectively a vulture fund and because they were not offered any discount. Moreover, they were never told the discount at which the mortgages were sold. People refer to a discount in the region of 50%, and this is more than likely the case. This is a problem because the code of conduct on mortgage arrears is not as strong as it used to be. I welcome the fact that the Government is seeking to remove the bank veto but its proposals do not do so.

The problem concerns areas where house prices have risen.Last year, more than 10,000 repossession orders were issued as a result of the Land and Conveyancing Law Reform Act, which the Minister of State's colleague, Deputy Shatter, brought in, which the House passed, and which set aside the Dunne judgment and made it easier for financial institutions to repossess people's homes. At the time, many people warned that we should expect a raft of repossession orders, and this has happened. If a vulture fund in New York has bought my €100,000 mortgage for €50,000 and thinks it can get full redemption of it, particularly if I am in arrears, it will go after me. This is happening. People who are paying their mortgages but who have an amount of residual mortgage arrears are being moved against, not just by vulture funds but also by Irish-owned banks. The code of conduct on mortgage arrears is irrelevant.

Today's report by the Central Bank stated that there has been no financial penalty against any financial institution. I have frequently had occasion to write to Bank of Ireland to ask why it has not offered a split mortgage to a client. The answer is that the bank did not and will not, and that is the end of the matter. The Minister of State should not wonder if I take the legislation and the Government's statement today not just with a pinch of salt but with a bucket. The Government's track record on protecting people who have mortgages and are in mortgage arrears has been abysmal. The legislation will let the people who own the mortgages off scot free. Only the administrators of mortgages, not the owners, will be covered by this. There are major deficiencies in this half-baked piece of legislation. It is 100 million miles away from what the Minister, Deputy Noonan, said he would produce.

The Minister could be in Europe, and I understand there are important negotiations ongoing there which he must attend. While I do not cast aspersions on the fact that the Minister of State, Deputy Dara Murphy, is here, and he is more than welcome, I am slightly bemused as to why the Minister State, Deputy Harris, is not here. The Leas-Chathaoirleach might insist that the Leader ensure a Minister who has responsibility within the Department attends Committee Stage here and hears the amendments we plan to table. We plan to table at least 12 amendments and I assume others will also table amendments.

Can anyone tell me why those who purchase distressed mortgages will not be covered by the legislation? I do not understand why one would bother bringing the Bill forward without it. There are issues with SME debt and certain anomalies within the Bill will cause difficulties for some major companies in Dublin in particular of which I am aware, and I will try to address them by way of amendment. The Department and Minister are aware of unintended consequences which may befall some SMEs as a result of the legislation and I hope this will be tidied up on Committee Stage.

I thank the Minister of State for outlining the Bill. I appreciate that he has taken the time to do it. It is vitally important that the Minister for Finance, Deputy Noonan, or the Minister of State, Deputy Harris, be here for Committee Stage. Although I would be inclined to vote the Bill down on Second Stage, we will take the opportunity to strengthen the legislation on Committee Stage rather than oppose it now. I hope the Minister will examine the amendments we will forward this evening. I assume the Bill will come to Committee Stage next week.

I would give the legislation score of four out of ten, based on what was proposed at the start and what could have been done. This is my humble opinion. Senator Gilroy will disagree with all of this, which is fine.