Fianna Fáil Bill on mortgage arrears is not a solution, says Kenny

Taoiseach Enda Kenny has rejected as unconstitutional a Fianna Fáil Bill to deal with mortgages in arrears.

Mr Kenny said the solution Fianna Fáil offered was not a solution because the party was referring all cases to the courts. And the proposals in the Family Home Mortgage Settlement Arrangement Bill, which was debated in the Dáil last night, “does not deal with the 37,000 cases that have had no engagement with the banks at all”.

He believed, however, that the banks “which know who the 37,000 are, should inform them of the availability of the insolvency agency”.

Fianna Fáil leader Micheál Martin, who raised the issue during leaders’ questions, said the scale of problem with mortgages in arrears was “enormous” and and there had been a “wave of repossessions applications and court actions” across the State.

Mr Martin said it was time to “call a halt” to the policy of giving the banks a veto on those in mortgage difficulties, because “it has not worked”. It had been the Government’s policy to allow banks to “dictate the pace, shape and nature of arrangements”.

Mr Martin said the personal insolvency framework had been “woefully underutilised at only 199 cases” and they did not know how many of those dealt with family home mortgages.

He said over 118,000 family homes were in arrears and 37,400 in arrears for more than two years, and their homes were in “imminent threat of repossession”.

Emboldened

The Fianna Fáil leader claimed the banks had been “emboldened by property price increases” and with the value of homes increasing “they can now get the whole lot back” in terms of the amount they had loaned.

He said there were 100 cases in Cork this week, and 208 listed in Limerick for Friday alone, and there were up to 8,000 cases in 2014.

He said their Bill, introduced by finance spokesman Michael McGrath, would use the existing personal insolvency structure and personal insolvency practitioners to deal with the issue in a sustainable way.

However claiming the Bill was unconstitutional, Mr Kenny said headway was being made.

He acknowledged that the number of cases that had gone through the insolvency agency was “disappointing” but said the number of mortgages in arrears for more than 90 days had fallen by more than 17,500 since last year.

Bankruptcy

Mr Kenny said the Minister for Justice was finalising a review of insolvency legislation which also covered bankruptcy and which the banks had not veto over.

He wanted to see “no house lost” but they needed a situation where “only the very smallest” amount of cases could not be worked out.

Mr Martin said people in arrears should not have to go bankrupt, but that was what the Taoiseach was suggesting. People wanted to get sustainable salutations but they were not getting engagement from the banks.

“The fundamental problem is that, as many people know, the banks have all the cards. They have the veto.”