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Mortgage Arrears: Motion (Resumed) [Private Members]

Vote from 27/03/2013

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The following motion was moved by Deputy Michael McGrath on Tuesday, 26 March 2013: That Dáil Éireann:
notes:

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Background information

The following motion was moved by Deputy Michael McGrath on Tuesday, 26 March 2013: That Dáil Éireann:
notes:
— the worsening crisis in respect of mortgage arrears, with over 94,000 residential mortgages in arrears for greater than 90 days and over 28,000 buy-to-let mortgages in arrears for the same period;
— that almost one in four family home mortgages and more than one in three buy-to-let mortgages are now either in arrears or have been restructured;
— the slow progress made to date by banks in identifying and implementing so- lutions for distressed borrowers;
— the additional burden being placed on families struggling with their mortgage arising from cuts to child benefit, PRSI increases, local property tax and other mea- sures in budget 2013;
— the adverse impact on mental health, the well-being of society and the domes- tic economy arising from the failure to adequately address mortgage distress;
— the widespread concern about the threat of a significant increase in family home repossessions arising from the mortgage arrears resolution targets programme, the proposed changes to the code of conduct on mortgage arrears and the Govern- ment’s plan to reverse the Dunne judgment; and
— that, in effect, the bank will retain a veto, in the vast majority of cases, over any proposal to restructure the mortgage under the planned new personal insolvency service;
recognises:
— the importance of tackling the mortgage arrears crisis to support economic recovery; and
— the best interests of society are served by ensuring that families can remain in their homes so long as reasonable efforts are made to meet their mortgage commit- ments;
calls for:
— the establishment of clear, consistently applied guidelines in respect of reasonable living expenses for distressed borrowers;
— the family home to be protected from repossession unless every other possible alternative has been exhausted, including giving the borrower the option of entering a mortgage-to-rent arrangement;
— the Government to refrain from introducing legislation that will remove obstacles to the repossession of family homes until such time as the Central Bank is satisfied that the banks are properly addressing the mortgage arrears crisis by entering into meaning- ful long-term sustainable solutions to mortgage distress with individual borrowers;
— the setting up of a mortgage resolution office, under the new Insolvency Service of Ireland, to arbitrate between borrowers and lenders and, where necessary, to make a binding mortgage resolution order; and
— greater emphasis on the implementation of long-term sustainable mortgage solu- tions such as split mortgages, shared equity and permanent interest rate reductions�

Debate resumed on amendment No. 1:
To delete all words after “Dáil Éireann” and substitute the following:
“acknowledges that this Government inherited a severe mortgage arrears crisis from the previous Government; and notes the responsibility of the previous Government for the creation of that crisis and its abject failure to properly address it;
recognises that the Government has already taken a number of significant steps to ad- dress the mortgage arrears problem and also to stabilise the banking and wider economic situation;
acknowledges, in particular, that shortly after taking office the present Government es- tablished the Inter-Departmental Mortgage Arrears Working Group and that it is now implementing the key recommendations of that Group’s Report;
notes the speedy publication by the Government of comprehensive legislation to reform our insolvency laws and the enactment of the Personal Insolvency Act 2012 which provides for non-judicial debt resolution mechanisms, which include a Personal Insolvency Arrangement which will facilitate the retention of their family home by individuals who are insol- vent and enable them to resolve debt issues by agreement with creditors with the assistance of a Personal Insolvency Practitioner;
recognises that Central Bank interaction with mortgage lenders is key to addressing mortgage arrears and that the Central Bank is now further intensifying its engagement with the main mortgage lenders to ensure that lenders offer sustainable solutions to their custom- ers in arrears;
supports the Central Bank in this work, in particular, in setting specific targets for action and in monitoring and auditing the achievement of those targets;
further notes the Central Bank’s review of the Code of Conduct on Mortgage Arrears to strengthen protections for customers and also allow to provide for effective, timely and sustainable resolution of individual arrears situations;
accepts that, for a functioning mortgage market, it is necessary to protect and vindicate, in a fair manner, the legitimate rights of both debtors and creditors;
while accepting that the option of repossession has to be one of the options to deal with mortgage default and distress, also notes the view of Government that this should only be an option of last resort and that there are a range of other resolution options available that can be deployed to deal with mortgage distress in the best interests of both the borrower and lender;
encourages the Government and other authorities to continue with the work to bring the Insolvency Service of Ireland, and the debt resolution processes provided for in the Personal Insolvency Act 2012, into operation as soon as possible;
notes that the Insolvency Service of Ireland will shortly publish guidelines on reasonable living expenses for debtors who propose to enter into debt resolution mechanisms; and
condemns the failure of the previous Government to publish or enact any legislation to reform bankruptcy and insolvency law, and its failure to create any statutory debt resolution mechanisms or structures to facilitate individuals in financial difficulty to resolve such dif- ficulties by agreement with creditors and to facilitate the restructuring of mortgage debt.”
- (Deputy Alan Shatter, Minister for Justice and Equality)

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