Statement on Behalf of Seamus Healy TD 087-2802199
AT Last Government Admits That There is a Problem for Low Income Families with Distressed Mortgages
Minister Quinn admits that more needs to be Done by Government to Keep People in their Homes
At leaders questions to-day Seamus Healy TD, for the third time, raised the question of low income families losing their homes under current debt resolution arrangements. Three weeks ago, Taoiseach Enda Kenny insisted there was a solution for all distressed mortgage holders which would enable them to stay in their homes. Two weeks ago, Tanaiste Eamonn Gilmore denied that the problem existed.
BUT To-DAY after Deputy Healy raised the issue a third time adducing irrefutable evidence, Minister Ruairi Quinn admitted that there was a problem ad that the Government would have to do more to keep people in their homes.
Under persistent pressure from Deputy Healy the government has shifted its position. Continued pressure is now required to make the Government act on its commitments.
The live debate can be viewed by clicking here wp.me/p1Uvd5-vu
The Dail Record is appended below
Paddy Healy 086-4183732 on behalf of Seamus Healy TD 087-2802199
Dail Record
Deputy Seamus Healy: I join with all Members in the Christmas and New Year’s greetings, particularly to the staff of the Houses of the Oireachtas, including the ushers, caterers, clerical and administrative staff who serve and support us.
The right to keep a roof over their heads and to continue to live in their family homes is one of the most cherished aspirations of the Irish people and people the world over. I make no apology for returning to the question of families being bullied out of their homes or legally compelled to leave by banks bailed out by the Irish people. The Taoiseach and the Tánaiste have refused to answer the question in recent times and I appeal to the Minister to address the question and answer it. It is very straightforward and I appeal to the Ceann Comhairle to ensure the Minister answers the question. For thousands of people, the fear of losing the family home is palpable and traumatic. It is giving rise to serious mental health issues. People fear the sight of the postman in case he or she has the dreaded letter from the bank demanding the sale or repossession of the family home. Since I raised the issue a fortnight ago, the rating agency, Fitch Ratings, has borne out my contention that up to 30,000 families face the loss of their homes under the insolvency arrangements put in place by the Government.
[Deputy Seamus Healy: ] Fitch puts the figure at 26,000 families on the basis of information given to the company directly by the banks. We are talking about people on low incomes whose only asset is a family home. They have fully engaged with lenders but have no disposable income.
This argument is widely accepted by people engaged in the mortgage distress area, such as the advocacy group New Beginnings, the free legal aid centres, the Phoenix project in Portlaoise, Grant Thornton and various personal insolvency practitioners across the country. New Beginnings has 1,000 distressed mortgage applications from people who see no out except for bankruptcy. Grant Thornton has a similar figure and when it studied 1,000 cases, it saw that up to 50% faced bankruptcy.
I want to ask a question I have already posed to the Taoiseach in the past couple of weeks. Does the Minister accept there is a serious problem and there are thousands of families on low incomes, below the minimum living expenses, who cannot avail of the insolvency process and who are facing the loss of the family home? What does the Government intend to do about that?
Deputy Ruairí Quinn: I agree with the Deputy in that we should extend our best wishes and appreciation to all members of the staff for the way in which this House runs so efficiently. With regard to the Deputy’s first question, my answer is “Yes”, and I accept that we have a problem. We have known that from the very beginning and since we came into government. It was one of the many problems we inherited from the previous disastrous Administration.
Deputy Ruairí Quinn: In respect to the Deputy’s second question, I accept that thousands of families are currently living in fear, and people in my constituency are struggling with the issue. As there has been a de facto moratorium on house building over the past number of years, there has been a significant increase in house rents, as Deputy Ó Caoláin noted. That has happened across the country and not just in the greater Dublin area, Cork and Limerick. We are trying to ensure, through massive change in the area of insolvency and mortgages, that systems can be worked out by families and lending institutions, including the two main banks, which have been massively recapitalised by the taxpayers in this country. That was so the banks could do what they were supposed to in this area.
Deputy Barry Cowen: We are getting that back in July, according to Enda.
Deputy Seamus Healy: I am not clear as to whether the Minister accepts the problem I outlined. Does he accept that there is a category of individuals – rather than individual families – numbering up to 30,000 families who cannot avail of insolvency arrangements put in place by the Government? As a result, they face the loss of their family homes. That will add another 20,000 or 30,000 to the 90,000 people already on our local authority house waiting lists.
Deputy Finian McGrath: Hear, hear.
Deputy Seamus Healy: They will also have to avail of rent supplement, at much cost to the State. Currently, the only solution for these families is bankruptcy. Does the Minister accept that as a solution for these families, as I certainly do not? What changes will the Government make in insolvency arrangements to ensure that this category of distressed mortgage holder can be helped? I repeat that these are blameless people on low incomes with no disposable income, so they cannot avail of insolvency arrangements. What changes will the Government make to ensure these families can stay in their homes?
Deputy Finian McGrath: Hear, hear.
Deputy Ruairí Quinn: Everybody in this House shares the concern which the Deputy has raised on a number of occasions. This Government has put in place a most comprehensive programme of action to assist householders struggling to pay their mortgages—–
Deputy Seamus Healy: That does not cover this category of people.
Deputy Ruairí Quinn: I am trying to reply to the Deputy’s question.
Deputy Billy Kelleher: The Minister is not listening.
Deputy Ruairí Quinn: We have rebalanced the rights of borrowers and lenders under the biggest shake-up of personal insolvency law in the century. We have given those who bought their first homes during the bubble significant increases in mortgage interest relief. That is not the end of what we are trying to do. I accept the concerns which have been expressed and although the figures are hard to calculate, they are of the order mentioned. Under this system, it is inevitable that some people will be faced with the prospect of losing their homes because of their circumstances. As a Government, we are prepared to look at the measures that can be adopted in that set of circumstances, where some kind of rental agreement or other form of intervention can be arrived at with institutions that in many cases have been funded by the taxpayer. This is to ensure that a family does not lose a home.
Deputy Joe Higgins: Write down the mortgages.
Deputy Peter Mathews: Correct.
Deputy Ruairí Quinn: Whatever way it is to be done, nobody in the House wants to see people put out on the street because they cannot repay amounts.
Deputies: Hear, hear.
Deputy Peter Mathews: Well do something about it.
Deputy Ruairí Quinn: Nobody wants that.
Deputy Finian McGrath: Fine Gael and Labour are the Government now. They still think they are the Opposition.
Deputy Seamus Healy: The current arrangements do not protect the people I have described.
An Ceann Comhairle: If Deputies are not prepared to listen, they should not ask the questions.
Deputy Ruairí Quinn: We all share the Deputy’s concern. This is an evolving problem and we have taken steps to resolve it in a number of areas. That does not mean we will not take more steps if necessary. In some cases, it probably will be necessary.
Deputy Peter Mathews: Of course it will.
Deputy Ruairí Quinn: The Government will not be found wanting.
Deputy Finian McGrath: They still think they are the Opposition.
Deputy Healy asks Minister Quinn if he accepts that there is a serious problem with regard to people facing homelessness, and also asks if he accepts that there are thousands of families on low incomes below the minimum living expenses who can not avail of the insolvency process and face the loss of their family homes as a result, and what does he intend to do about this?
Deputy Healy also asks Minister Quinn if he accepts that bankruptcy is a solution to these families, as Deputy Healy does not? and also Deputy Healy asks what changes are his government going to make in the insolvency arrangements to ensure that this category of distressed mortgage holder, who can’t avail of insolvency, can stay in their homes.
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.
Workers & Unemployed Action 