Gerry Horkan (Fianna Fail) | Oireachtas source

Fair enough. As Senators are not members of the select committee we could not attend that particular module.

As I said yesterday during the Order of Business, we need to consider this matter in a holistic and joined-up way. As the Minister of State has mentioned, there is the potential for PTSB to dispose of 14,000 home loans for private dwelling homes, PDHs, after the bank was unable to work through them and spent ten years ignoring them. If I owed money to somebody or somebody owed me money and I left it for ten years I would not expect to be able to collect the debt. What has Permanent TSB done for the past ten years with these people?

We must distinguish between the people who are genuinely doing their best and those who have not responded to any communications for five years. We need to see a breakdown of the 14,000 home loans. Are they people who have missed a payment or two? Have they experienced a little blip here or there due to a family crisis, emergency or something and were unable to make a particular payment? Have they just said "No, I am not paying" and decided to live the high life, go on holidays, buy new cars and not pay a mortgage. I do not know how many such cases there are but I would like to know before we start selling the loans to the funds.

Perhaps a vulture fund will not buy the loan book but I do not know who else would do so. It is not the objective of a vulture fund to carefully manage the homeowner back into a position where he or she can repay the debt over time. The vulture fund just wants to buy the asset at the greatest discount possible, get the person out of the house and flip the property. As property prices increase the houses become more attractive for that particular purpose. That might be the reason there were not many repossessions in 2011 and 2012 when the property market was on the floor. Now that property prices are rising quickly there is scope for people to flip properties.

We must remember that PTSB is still 75% owned by the State and the shareholder is the Minister for Finance, on behalf of the people. The board should reflect the shareholding but it is not the case at present. The board should reflect the ministerial appointees, as the shareholder, on the board of PTSB. They should make decisions in the interest of the country, although corporate governance is very important, and look after the entity. I acknowledge that 28% is a shockingly bad percentage of non-performing loans, NPLs, particularly when the eurozone average is about 4.5%.

There is potential for 14,000 homes to be repossessed but perhaps not all of them will be repossessed. If they are repossessed then 14,000 families looking for a house will appear at the constituency clinic of the Minister of State and those other people in this House and the Lower House. We already have a housing crisis without 14,000 more households looking for houses. If one divides 14,000 households by 40, the number of Dáil constituencies, then there will be about 350 households looking for housing in every single Dáil constituency. Other people have speculated that there could be 20,000 home loans so that would mean there would be 500 households per Dáil constituency seeking housing. Obviously the number would be higher in some constituencies. It is very important that we consider this matter from the State's point of view and not just from the viewpoint of PTSB.

I accept the point that the Minister of State made about the Single Supervisory Mechanism, SSM. Surely each homeowner should be written to and informed whether his or her loan is included in the package of home loans based on his or her performance, whether the bank will sell the €200,000 loan for €80,000 or whatever the discount will be, and if the homeowner comes up with the same money or finds a way to do so then the bank will give first refusal. Some people will be unable to come up with the money but other people might be able to do so. They might be able to secure a mortgage from a different institution for a longer period but at a smaller amount and pay off the original mortgage which would be far preferable to selling the loan at a huge discount.

I would prefer if everybody paid their mortgages. An awful lot of people have struggled and made huge sacrifices to pay their mortgage payments, particularly people who bought between 2004 and 2006 when house prices were at their peak. I know that we do not want moral hazard. However, we must acknowledge that these houses may go to a vulture fund or vulture funds and may be repossessed because of non-performance. I acknowledge that banks have not been that big into repossessions as much as some people thought they were. I contend that maybe we are in this situation because the banks have not been strong in terms of dealing with people. Dún Laoghaire-Rathdown County Council had to deal with waste charges. In the end people were told not to pay their waste charges, the debts built up and the county council ended up privatising the service due to the number of debts. I am not saying that people should not pay their loans. I am saying that we must realise that if we allow these homes to be sold and if PTSB decides, despite being 75% owned by the State, to sell all of these home loans then we will end up having to house 14,000 more families, potentially, than we do at the moment. The waiting lists for housing are long enough already.

Various people have commented over the past few days. Edmund Honohan referred to the Taoiseach's letter to a homeowner as a joke and said that there was no use in these people contacting the organisation called Abhaile because it merely provides €250 worth of legal advice. That solution will not solve the problem for somebody. Mr. Lorcan O'Connor from the Insolvency Service of Ireland said that people should be allowed to work through their loans if they are sustainable and many of them may be sustainable.

The Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach has invited PTSB to attend a meeting next week. I do not know whether the bank will take up the offer. I would like to see the bank's proposal. I want to know how bad the non-performing loans are. The easiest thing in the world is to just take the hit. Let us remember that we will take 75% of the hit whatever discount is given to the vulture fund and, ultimately, the State will lose. We need to examine the matter in a forensic manner. I asked that the Order of Business be changed to reflect reality and that we would have statements on the proposed sale of the loan book because the sale has not happened yet. As a State we need to appreciate that if the sale goes ahead houses will be repossessed and we will have to rehouse those households at a huge cost to the State. Let us think about this matter in a holistic way before proceeding with the sale.