I compliment Deputy Michael McGrath for introducing this Private Members’ Bill. He has caught the mood of the discussion in the media and on the airwaves in view of some recent highly publicised cases. A total of 37,484 families have mortgages in arrears for more than two years and are in danger of having their homes repossessed. This is a very chilling figure. I hope Deputy McGrath’s Bill, the Family Home Mortgage Settlement Arrangement Bill 2014, will remove the bank veto on solutions for mortgage debt. Banks should not be allowed to dictate the pace of any restructuring arrangements but it is a very worrying fact that repossessions have doubled in the past few years. Decisive action is required to ensure the number of repossessions is not increased in 2015.
The Bill proposes to refer these cases to a court of law but these cases have already come before the Circuit Court, with more than 8,000 civil bills for an order of possession lodged in the Circuit Court. Both the Taoiseach and the Tánaiste, as well as many Ministers, have stated they are not happy with a situation where some banks ignore the recommendations of personal insolvency practitioners to deal with distressed mortgages.
I am very concerned that banks have been allowed to use legal action as a means of meeting the targets in the mortgage arrears target programme. More than 15% of mortgage accounts for family homes are in arrears and they account for more than 20% of the outstanding value of all family home mortgages. The Central Bank figures show that the mortgages on 117,000 principal home dwellings are in arrears and 60,000 of those are in arrears for one year or more. With rising prices there could be a greater risk of homes being repossessed.
I refer to an article in last Monday’s The Irish Times by Dr. Rory Hearne, about the housing crisis, as he termed it. He wrote that Central Bank rules have allowed banks to reclassify mortgages as restructured if a legal notice for repossession has been issued. This has been done to 50,000 homeowners, with a potential flood of repossessions and evictions if the trends in the courts continue. I cite the lovely Irish saying that a problem shared is a problem halved but a mortgage problem cannot be halved and this is becoming very clear to people. I have met constituents who made that point to me. I would welcome any assistance from banks but there is no engagement to deal with the serious issues facing people. I hear information about interest charges and surcharges on loans and the banks are very quick to explain the charges per month and per annum applying to accounts in arrears. This is an issue which demands our urgent attention.
Growing numbers are facing the prospect of losing their family home because they cannot repay their mortgage. The House has been informed that the number of home repossession cases has increased so dramatically that additional court sittings are being scheduled to deal with them. The Seanad was told recently that 8,000 civil bills for an order of possession were lodged in the Circuit Court last year. The pressure is so great that some cases are being heard by county registrars rather than by a judge. The problems are clear. It has been suggested that this surge is because the banks believe that rising house prices in Dublin in particular have given them an opportunity to recoup some of the losses they had faced when forced to sell a property.
Deputy Michael McGrath said the banks should have a clear strategy to ensure they do not take any further legal action for repossession. His Bill is a fair response and it should be supported as an appropriate legislative intervention which could have significant implications for people who are in mortgage distress.