Deputy Healy highlights to the Tánaiste the case of 30,000 families who do not qualify for insolvency under the new arrangements and who are facing eviction, and he asked the Tánaiste: “Will the Government exercise sovereignty by preventing reckless bailed-out banks, some owned by international vulture capitalists, from evicting 30,000 families in this country”.
Séamus Healy (Tipperary South, Independenkt)
Up to 30,000 families face eviction due to the failure of the Government to protect them. They are distressed mortgage holders who have fully engaged with the banks. They are not strategic defaulters. Their only property is their family home. They do not have buy-to-let properties. In most cases they have modest mortgages. In all cases their incomes have collapsed due to the recession. The Insolvency Service of Ireland has set out living expenses for personal insolvency arrangements. Under those guidelines a family of two adults and two children must have minimum living expenses of €24,780 per year to qualify for insolvency arrangements. Such a family on jobseeker’s benefit or allowance has an annual income of €19,364, which is significantly less than the minimum living expenses under the guidelines. A similar family with one person in employment at a wage of €9 per hour – in excess of the minimum wage – and including FIS, has an income of €23,193 per year. Again, that is less than the minimum living expenses set out under the insolvency service.
Those two families have no net disposable income, as calculated by the Insolvency Service of Ireland. They have no money to give to the banks. They do not and cannot qualify for the insolvency arrangements. There are up to 30,000 such families. Paul Joyce of the Free Legal Aid Centres told us this morning that thousands of such families have had their proposals vetoed by the banks. I have letters from constituents who have been given the option of having a voluntary sale, making a voluntary surrender or being evicted. They are banks which the public has bailed out.
Last week the Taoiseach refused to answer my question on the issue but he repeatedly stated that there is a solution for everyone. Does the Tánaiste regard bankruptcy and repossession of the family home as a solution for those blameless families? Is that the reason the Government removed the legal ban on repossessions? One could ask whether that is the reason the indefensible situation has arisen whereby the Government has allowed the Central Bank to reduce the moratorium on repossessions from 12 months to two months. Will the Government ensure that the families which have fully engaged—–
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
The Deputy is well over time.
Séamus Healy (Tipperary South, Independent)
—–and have modest mortgages that are not buy-to-let properties, who are not strategic defaulters—–
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
The Deputy should put his question please. He is way over time.
Séamus Healy (Tipperary South, Independent)
Will the Tánaiste ensure that these families will be allowed to remain in their homes?
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
I do not agree that 30,000 families face eviction. However, 30,000 families would face eviction if the Government had not taken the steps it is taking to deal with the mortgage arrears problem. That is why today, for example, the new personal insolvency legislation will come into effect that will reduce from 12 years to three years the period of time for bankruptcy. I also agree that the solution to the mortgage arrears problems experienced by many families is neither bankruptcy nor losing their home. The cornerstone of the Government’s approach to mortgage arrears is to ensure that families are able to continue living in their home. That means solutions must be found where families and households are in mortgage difficulty. The solution will vary from case to case. We have now put in place a range of measures to help families in mortgage distress. The personal insolvency legislation strengthens their hand in their discussions with the banks. The Insolvency Service of Ireland has been put in place. A range of non-judicial debt settlement arrangements have been built into the legislation. A range of measures is also in existence which will allow for engagement between mortgage holders and their lenders. To date, more than 45,000 permanent mortgage restructures have been completed. There is still more to be done. Far too many families are in mortgage difficultly and work must continue on a case-by-case basis with them to resolve their mortgage difficulties in a way that ensures they can continue to live in their homes.
The whole point is that we do not want to see people losing their homes. The very approach of Government policy is to avoid that. Probably the biggest fear people have had during the recession, which has been even greater than the fear of losing their jobs, has been the fear of losing a home. That is why we have taken the approach we have taken. We have put in place legislation and the personal insolvency service and we have set targets for the banks to engage with borrowers and to reduce the number in mortgage distress. That work must continue. There are still many families whose mortgage arrears have not yet been resolved, and work must continue to ensure this is addressed.
Séamus Healy (Tipperary South, Independent)
The Tánaiste has refused to answer the question. I have asked about a specific group, comprising families, that will not qualify for the insolvency arrangements about which the Tánaiste has spoken. He may not accept it but it is accepted widely, both within this House and outside it, that thousands of families do not qualify for the insolvency arrangements. New research by Grant Thornton Debt Solutions has found that many people seeking insolvency arrangements do not have enough income to qualify. Mr. Michael McAteer of Grant Thornton said recently on Newstalk that the only solution for these families is bankruptcy.
The Icelandic Government announced today that it will defy the banks by writing off up to €24,000 of household mortgages. Iceland obviously has real sovereignty.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
I ask the Deputy to put his question.
Séamus Healy (Tipperary South, Independent)
Will the Government exercise sovereignty by preventing reckless bailed-out banks, some owned by international vulture capitalists, from evicting 30,000 families in this country?
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
We want every family and householder in mortgage difficulty to have that difficulty resolved and to avoid up losing their home. There is no family that we want to see excluded from the arrangements we have put in place to resolve mortgage arrears difficulties.
There is not a single solution that fits every case.
Séamus Healy (Tipperary South, Independent)
There is a particular group.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
If the Deputy has a particular case in mind, he should let me know.
Séamus Healy (Tipperary South, Independent)
There is a group of 30,000.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
There is not. At the beginning, the Deputy said there were 30,000 families facing eviction. There are not.
Séamus Healy (Tipperary South, Independent)
There are.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
There are not.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
Deputy Healy has had his say. I ask the Tánaiste to speak through the Chair.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
There are not 30,000 families facing eviction, nor will there be. However, there are 30,000 families who would be facing that prospect if we had not put in place the measures we have put in place to deal with the issue of mortgage arrears.
Séamus Healy (Tipperary South, Independent)
The group does not qualify for the arrangements, as the Tánaiste knows.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
We have exceeded the time allowed.
Eamon Gilmore (Tánaiste; Minister, Department of Foreign Affairs and Trade; Dún Laoghaire, Labour)
There is no question of their not qualifying. Every single case of mortgage arrears difficulty must be resolved, and issues must be resolved on a case-by-case basis.
Séamus Healy (Tipperary South, Independent)
Up to 30,000 families face eviction due to the Government’s failure to protect them. Mortgage holders will not qualify for the insolvency procedures because they have no disposable incomes or disposable assets. They have fully engaged with their lenders. They are not strategic defaulters. Their only assets are their family homes. They hold modest mortgages, many of less than €100,000 and almost all of less than €200,000. They are all low-income families, many headed by unemployed people.
They are in this position through no fault of their own. They took out mortgages when employed to put roofs over their heads and to provide for their families. Now, they are unemployed because of the reckless activity of the entire Irish establishment, including the Central Bank, the banks, the Government, their cheerleaders in the media and the State research bodies that predicted a soft landing.
The same banks that destroyed society and that we bailed out are threatening these genuine mortgage holders with eviction. I have a letter from one of the pillar banks to such a mortgage holder. It outlines the options available to the person, including voluntary sale and voluntary surrender. In the event of a shortfall, the person would remain liable under all of the options for the outstanding debt, including accrued interest, charges and legal, selling and related costs. The bank would always seek the gross sale proceeds.
The letter threatened eviction. The bank noted that—–
Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
The Deputy is limited to two minutes.
Séamus Healy (Tipperary South, Independent)
—–forbearance was not appropriate, given the fact that the person’s financial position was unsustainable, and that, if the repayments due were not met and arrears accumulated on the mortgage, the matter would, regrettably, be referred to solicitors.
Such conduct from banks that we have bailed out is outrageous, unjust and unfair.
Tommy Broughan (Dublin North East, Labour)
Hear, hear.
Séamus Healy (Tipperary South, Independent)
Will the Government legislate urgently to enable these unfortunate and blameless families to stay in their homes or will it continue to allow the banks to deploy the modern equivalent of the battering ram?
Deputies:
Hear, hear.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
The position is that I would say all parties in this House elected by the people do not want to see anybody thrown out of their home. The sad fact is, however, that, in a number of cases, it is going to be very difficult for some people to hold on to their homes – some.
Séamus Healy (Tipperary South, Independent)
Up to 30,000.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
The Government has put in place all of the mechanisms to help every person who is a mortgage holder who has got a problem. There are 47,000 restructured permanently already. The numbers are being assessed by the Central Bank. Despite the fact that the party opposite decried the personal insolvency agency, claiming that banks had a veto and that this would result in thousands of people being evicted, the first evidence of cases going through the personal insolvency agency do not seem to indicate that.
Robert Troy (Longford-Westmeath, Fianna Fail)
Does one case tell the story?
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
As these cases are worked through, we will have evidence of the actual situation. If those hard-working people who, through no fault of their own, find themselves in this position of having a problem with their mortgage, the first thing they must do is engage with the lender.
Séamus Healy (Tipperary South, Independent)
They are fully engaged. They have done everything.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
There are requirements and codes and targets set out and—–
Peter Mathews (Dublin South, Independent)
The lenders should engage with the customers.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
—–being implemented by the Central Bank to work out a solution in each and every case. The Governor of the Central Bank has been very clear about the targets set by the Central Bank for banks and lending institutions to work out solutions in each and every case. It is perfectly obvious that the people who are applying for mortgages and who are in a position to purchase houses are not going to get caught in the same trap as those who have gone before them.
Despite much cynicism, the Government has acted responsibly to put in place codes of practice, targets and legislation to help the very people Deputy Healy spoke about. If they took out a mortgage and found that because of unemployment or other changed circumstances they are unable to pay, there is now a solution for every case. It means, however, that in every case those concerned must work out what solution is in their best interests. We do not want to see anybody lose their homes.
Séamus Healy (Tipperary South, Independent)
What is the Taoiseach doing for this specific group of people?
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
Some cases I have come across are very difficult.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
Now the Deputy can speak properly. He does not need to interrupt.
Séamus Healy (Tipperary South, Independent)
If the Taoiseach would answer the question we would have some basis for discussion.
Seán Barrett (Ceann Comhairle; Dún Laoghaire, Ceann Comhairle)
Please proceed, anyway.
Séamus Healy (Tipperary South, Independent)
While the Taoiseach continues to put his head in the sand and washes his hands like a Pontius Pilate act, many of the people I am talking about will end up on the streets, as Focus Ireland said this morning. It is certain that families evicted from their homes will end up on the huge local authority housing waiting lists. Some 110,000 families are already on those lists and more will join the end of that queue. It is also certain that they will be entitled to rent supplement at a significant cost to the State.
The mortgage to rent scheme would allow these families to stay in their homes on a rental basis and also give them an option of repurchasing in future if their financial circumstances improve. Surely that scheme would be both socially and financially beneficial to families, the State and even to the banks. However, even though we bailed out the banks they are resisting this scheme. The Government seems to have abandoned the scheme. There have only been 60 approvals in that scheme since it was introduced.
Will the Taoiseach personally intervene with the banks to ensure that they fully operate the mortgage to rent scheme? That would give some hope to the 30,000 families involved who are facing eviction. This is a huge problem.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
Some 70,000 mortgages have been restructured.
Séamus Healy (Tipperary South, Independent)
I am not talking about those.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
There were 45,177 permanent mortgage restructurings up to the end of September, which is an increase of 3,500 on the August figure. The Minister of State, Deputy Jan O’Sullivan, is working on a number of those smaller, more precise areas, including mortgage to rent and split mortgages. She is following through on that.
Séamus Healy (Tipperary South, Independent)
Will the Taoiseach intervene with the banks?
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
There is a solution in each case for every person who has a mortgage difficulty, and the figures are well known. However, they must engage with the lenders.
Séamus Healy (Tipperary South, Independent)
They cannot do so because the lenders are not engaging with them.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
There is no point in leaving the matter aside because it will not sort itself out. A deal has to be cut in all these cases. That is why 70,000 mortgages have been restructured and over 45,000 have been permanently restructured. That did not happen of its own accord. It is because of the legislation, the targets, the code of practice and the assistance for people to engage directly with lenders.
Séamus Healy (Tipperary South, Independent)
It will not happen in these cases unless the Taoiseach intervenes.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
The housing supplement is being changed to give a different incentive so that people will have an opportunity to get back to work. The letter that Deputy Healy has is not a solution.
Séamus Healy (Tipperary South, Independent)
Absolutely. It is not a solution.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
Thousands of those letters went out from banks. Neither the Deputy nor I are responsible for the tone of that letter.
Séamus Healy (Tipperary South, Independent)
It is going out to those 40,000 people.
Enda Kenny (Taoiseach, Department of An Taoiseach; Mayo, Fine Gael)
This matter has been discussed with the Central Bank whose Governor has set down targets for every bank to sit down with every mortgage holder and work out a solution in each case. Evidence of the much decried personal insolvency legislation is now becoming clear from the initial cases going through, that the banks do not have a veto. If the banks decide not to deal through the personal insolvency agency, they may get nothing at all if the person follows a bankruptcy route. That has been changed from 12 years to three.
Workers & Unemployed Action 