Colm Burke (Fine Gael) | Oireachtas source

I welcome the Minister of State to the House. I also very much welcome this Bill. As someone who is involved in the political and the legal arenas, I am very familiar with the issues that can arise. One of the concerns I have on occasion is the lack of engagement by the lending institutions with the borrowers, in particular where there are a number of properties involved and where one section of the bank may be dealing with business loans while another section is dealing with personal loans. I find the two sides will not meet when one wants to sit down and hammer out a deal. That is one of the most frustrating things I have come across.

I have also come across the very poor situation of receivers being put in charge of properties. I can give the Minister of State an example of a case I am involved in where a receiver from Dublin was put in charge of a property in a country town in County Cork. After two years later, we found that property had gone to rack and ruin because the receiver did not do its job. Should the borrower carry the cost of the devaluation of that property? Properties have gone up in value over the last three to four years, yet this property has gone down substantially in value, by approximately 66% in real terms. There are other borrowings in this case. We have found that the lending institution is impossible to deal with and will not talk to us about the mess it created. It is wrong that people are dealt with in this way. Different legal practices are acting for the different arms of the same bank and we have found that the two or three sides will not meet to deal with the issues that have arisen.

I very much welcome this Bill in respect of certain issues concerning the repossession of family homes. We need to have a more comprehensive mechanism in terms of engagement. One of the most frustrating things for people is the inability to communicate with someone in the lending institution. That is the biggest challenge I have found. I am dealing with three or four of these cases. I am trying to tie someone down in terms of arranging a meeting on a particular day and at a particular time so that we can go through the issues. I find this extremely frustrating.

There is another side to this which I find frustrating. I was in the High Court last Tuesday week. People are using the court system to delay resolution and that is not helpful either. I was not there on a borrowing matter but on another matter but I witnessed what I would consider was not proper co-operation on both sides, which is not helpful either.

It is important that in the case of a family home, particularly where there is a young family, every opportunity is given to try to come to a resolution of the issue.I have indicated figures to the Minister of State and we are fortunate as deposits in Irish banks and financial institutions now exceed the amount of lending. We are therefore now in a better position than we were a number of years ago. Our net household borrowing is approximately €150 billion but deposits are slightly higher than that now in real terms, which is a welcome change.

My understanding is we are now down to approximately 57,000 households in negative equity. That figure will probably continue to improve and one newspaper recently indicated that within the next six to eight months, there will be very few households in negative equity. A person may not be in negative equity but the question remains as to whether there is still the capacity to repay the borrowings that remain; those are separate matters. The question is whether banks will move on properties when they realise there is no longer the risk of negative equity but there could be major consequences for a family with that move. It is something we must deal with. Have we got any figures on the overall numbers of people not engaging with banks? It is still a little unclear as to what is occurring there if for some reason people do not engage with banks. As a result, all we are hearing about is people going to court, so it would be helpful to have some kind of information on that. Most people want to engage and deal with the matters allowing them to stay in a family home.

There is also the matter of cases where parties have separated, meaning just one party might be dealing with the bank while the other party has opted out of the process. This presents a major challenge and nine times out of ten we will find the party who wants to engage and is in the family home is also the party looking after children. It is a challenge we must also deal with and it needs to be taken into account. Trying to get the person who has decided to opt out back in so as to ensure he or she can make a contribution to support the family is important.

I welcome the Bill, which will be helpful in trying to deal with issues presented to families in courts.