Mortgage Restructuring: Motion

Wednesday, 20 February 2013

I wish to contribute on the issue of mortgage distress, something with which I have been involved for quite a while. Set into the Irish psyche is the need to own one’s own home. This desire was probably ingrained from Famine times when the Tenant Right League began to demand the three Fs, namely fair rent, free sale and fixity of tenure. The rush of a new generation to buy a family home was all-consuming and unfortunately has trapped not only this generation of first-time buyers but also those who sold existing houses to move upwards and onwards. Each group bought according to their disposable income at the time and are now trapped in a financial nightmare.

Strangely enough, the solution which should have worked in 1847 with the three Fs might work here through split mortgages or parked percentages of mortgages. Fair rent equates to a fair payment, to what the mortgage payer can pay in terms of principal and interest. Fixity of tenure holds that as long as the person can actually pay what has been agreed, he or she will not be evicted. Free sale refers to an ability to sell a house with whatever tie-in it has on it. It is very important for us to remember that this issue must be pursued. The banks are doing that and I am dealing with them a lot in this regard but they are only getting through 1,500 cases per month. They must be given the resources to make sure that we can get through each individual case of mortgage distress because the fear of losing one’s home is all-consuming. We must reach a point where each person is dealt with on the specifics of his or her own case.

This situation will not go away and not reaching a decision is simply kicking the can down the road. Debt write down may be necessary in some cases, while in others it may be possible to spread payments over a longer period of time to enable people to pay their debts. Either way, we must grasp the nettle and work on it. In fairness to the banks, they are engaging and the Irish pillar banks are doing a lot better than some of the foreign banks, which must be acknowledged. The skills for dealing with this crisis must be developed. I appreciate this issue being raised because it is one of the largest crises facing this country. Until we get this right, we will not be out of trouble. We will be judged as a Government on how we deal with people, fairly and equitably.