Séamus Healy (Tipperary South, Workers and Unemployed Action Group) | Oireachtas source

I wish to share time with Deputy Luke 'Ming' Flanagan, with the agreement of the House.

There is huge mortgage distress in this country, with almost 12% of mortgages in arrears of more than 90 days. There is also an enormous level of negative equity, with property values down by approximately 51% since the boom. We also have extremely high levels of unemployment and emigration. There are many people who are simply and honestly unable to make mortgage repayments and who are in serious financial difficulties. What those people need is a mortgage bailout. However, this Bill proposes to ensure it is easier for the banks, which have been bailed out to the tune of billions by the citizens of this State, to repossess homes and evict families. It is difficult to believe such a Bill is before the House. We treat the banks and bondholders in one way, supporting them and bailing them out, while we treat honest-to- goodness householders and mortgage holders in a completely different way, ensuring they are put under continued pressure and at risk of losing their homes.

We must support distressed mortgage holders. Mortgage rates must be frozen at September 2008 levels. The capital debt should be reduced to the level of current house prices and, far from ensuring the banks can more easily repossess homes and evict people, we should provide legal protection for householders in this situation. We must remind ourselves of how all of this came about. During the boom, the kept economists and commentators of the finance houses and banks and the media told people to get their foot on the property ladder before house prices increased further. They said there was no chance of a property crash, that there would be a soft landing and that the banks were well capitalised. RTE broadcast such comments almost daily. Every national newspaper published such forecasts and advice, along with enormous property supplements. They told people not to miss the opportunity to get on the property ladder. Now, tens of thousands of people are in negative equity and are finding it impossible to make their mortgage repayments. Some have been threatened with eviction and more will be so threatened.

The Central Bank is funded by taxpayers, including mortgage holders. It is the duty of the Central Bank to ensure prudence in banking. There were top business people, top trade union officials and senior civil servants on the board of the Central Bank during the so-called boom, who reported to the Minister for Finance. They allowed banks to borrow €90 billion abroad between 2003 and 2007. They also allowed the banks to lend out that money, with meaningless security, to developers and others, creating a property bubble which drove the price of houses over the moon. I include here professors of economics from the ESRI, an institute that is also funded by taxpayers and charged with giving expert advice to the Government. Nobody shouted stop. The Government, the print and broadcast media, auctioneers, valuers and many others advised people, young couples in particular, to get their foot on the property ladder. They were all wrong and those same young couples are now in enormous difficulty.

I believe that mortgage interest rates should be frozen at 2008 levels, capital debts should be reduced to current property values and we should legally protect mortgage holders from eviction. We certainly should not be making it easier for the banks to evict people and repossess homes.

The current situation with regard to mortgage arrears is horrendous. At the end of 2012, 11.9% or 94,488 mortgages were in arrears of 90 days or more.

Significant numbers of people have found themselves in negative equity. I came across somebody recently who bought an apartment through the affordable housing scheme in Dublin. It cost €275,000 but was meant to be affordable as apartments in the same block were on the market for €375,000. The individual is now in the position where the apartments have lost at least 51% of their value, with the market price perhaps as low as €120,000. That is huge negative equity. The person in question has had two wage cuts and a pension levy applied, and he will have a home tax to contend with as well as astronomical management fees and a water tax next year. That is the kind of pressure being felt by ordinary people who took the advice of Government agencies in buying their homes. It is time for the Government to support such people rather than make it easier for banks to evict them.

One can contrast what has happened to those people with what has happened to bankers and bondholders. Bankers still have controlled salaries of up to €500,000, and there are also uncontrolled salaries. Last week the Minister for Finance would not even vote against a salary of €843,000 being approved for a particular banker. A part-time chairman in the same bank receives approximately €394,000, and every auctioneer, valuer, solicitor and developer-type professional in the country, who led mortgage holders into difficult positions, is being employed by NAMA and the NTMA and looked after by the State. It is time for the State to look after the citizens and householders.

The Bill should be withdrawn as it is wrong to take away what little support was afforded to mortgage holders by the 2009 Act. The Bill should be redrafted with the provision I have discussed withdrawn. Other areas have been highlighted to Members by various other organisations, like New Beginning and the Free Legal Advice Centres, and these should also be taken on board. They concern waiting times and using the Circuit Court in preference to the High Court for proceedings. There is also a case for providing legal and financial support and advice for mortgage holders who find themselves in severe difficulty.

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