Kieran O'Donnell (Fine Gael) | Oireachtas source

Does the Bill do anything to increase the supply? The most significant issue in the housing market at present is the level of supply. The Bill does nothing to address the issue of supply, but basically deals with a group who have distressed loans with the banks. The other issue the Bill does not address, is the issue of sustainable mortgages. The problem is that people bought three bedroom, semi-detached houses up and down the country, and took out mortgages for close to €300,000. This was crazy. It was not sustainable to service such a mortgage. If the loan is moved to a national housing co-operative, the entire debt on the house is moved. The banks must come to a resolution. If the debt is written down to what is regarded as a recoverable amount, the banks have already taken the hit on their balance sheet. Why should they be selling the debt on to somebody else? Why should we not come up with a mechanism where the bank can deal with the individual mortgage holder?There is much doublespeak going on here in that, ultimately, it suits the banks to sell loans in large numbers and not have to deal with the issue. I would put it a different way. We have bailed out the banks at considerable cost. Even with €14 billion of face-value book loans purchased at €5 billion of a write-down value, it is €9 billion that the taxpayer has already bailed out. When I speak about the taxpayer I am talking about the citizen, the person on social welfare who is paying VAT on goods purchased. These people pay excise duty on drinks and cigarettes. It is the holistic meaning of the term "citizen". They have already paid for it. The question is whether the solution lies within banks.

This has brought about at a critical time a discussion around how we deal with what we know colloquially as vulture funds but what are large investors in multiple loans sold by banks. The discussion is about how we deal with them selling home and residential loans, not to mention small business loans. We must consider whether banks must step up to the plate and accept their share of responsibility in giving mortgages to people. They were being doled out like confetti. I was elected as a councillor in 2004 and met people who got mortgages they should not have got. Everything was set up to give mortgages to those people. We have a very fundamental idea instilled in us, referenced by Senator Norris, in that we value the ownership of our home and we see it as an aspiration of everybody to enable somebody else to own a home. Even if this goes to a co-operative, it does not change the basis for a home owner, who still has a full loan and may end up as a tenant. These people may never own their home. We need to find a structure to enable people to own their home. The banks are doing write-offs so they can be sustainable. They have already done the write-off on their balance sheet as it is.

I have a few points on the structure of the Bill. I referred to this in the finance committee and I am trying to be constructive. I am working from the view that we are now at a juncture where we must look at maintaining people in their homes and, additionally, getting them back to being in control of the purchase of their homes over time. The co-operative can either buy the loan or the property. If the co-operative buys the property, the individual would remain as a tenant. Such people would not own the house, despite living in it before. They would probably be entitled to a form of rent supplement or housing assistance payment, and the State would effectively be paying for it. The worry would be that the national housing co-operative would create another residential mini-NAMA. We need to move beyond that and put the responsibility back on the banks to sort out the mess they created so people can remain in homes.

The mortgage-to-rent and other schemes must be examined again to see if they are fit for purpose. The worry is there are many questions about funding and this does not bring about any increase in supply or lead to sustainable mortgages.