Mortgage arrears Bill withdrawn from Dáil
LEGISLATION GIVING judges powers to refuse home repossession orders has been withdrawn from the Dáil for talks about including some of its provisions in the Government’s promised insolvency Bill.
Independent Wicklow TD Stephen Donnelly introduced the legislation yesterday in a bid to give judges discretion in dealing with applications from banks for repossession of family homes in mortgage default.
Under current laws the courts must enforce repossession at the end of the one-year moratorium.
Mr Donnelly’s legislation, the Family Home Protection (Miscellaneous Provisions) Bill provides for courts to take account of other factors such as efforts by families to restructure their debt.
Minister for Justice Alan Shatter rejected the Bill, describing it as unconstitutional and unworkable in its present form. He said other factors were already “effectively taken into account” by judges. The Minister, however, praised the Independent TD’s “well-intentioned and laudable” efforts to offer elements of protection to homeowners.
Mr Shatter hoped to introduce the Personal Insolvency Bill by the end of April, which he described as “the most radical reform of our insolvency laws since the foundation of the State”, providing for a non-judicial system for the settlement of debt.
In an unusual move for a private member’s Bill, Mr Donnelly withdrew his legislation at the Minister’s request for talks about including elements of it in the Government’s forthcoming personal insolvency and bankruptcy legislation.
Before the Minister’s request, Independent Dublin Central TD Maureen O’Sullivan expressed her concern about the monthly Friday sittings of the Dáil, primarily used to discuss Opposition legislation. Ms O’Sullivan asked: “What’s the point of Friday sittings if anything suggested on this side of the House is automatically turned down by the Government.”
About 25 TDs attended the Dáil for the debate.
Mr Donnelly spoke of one couple in his constituency – a public sector worker and a businessman whose family home and business were in negative equity.
He said the bank had raised the variable mortgage interest rate four or five times in the past year, doubling their mortgage and forcing them into arrears.
“In this case one thing I cannot get out of my mind is that the lady said they are now watching the amount of toothpaste they put on their toothbrushes because they are left with so little money.”
The judge had no discretion to make the case that the borrowers made a reasonable offer and that the bank had “essentially forced them into arrears through its actions and that it is not reasonable for the bank to take the house. This is at the nub of what the Bill tries to do.”
He said one in 12 mortgages was in arrears of more than 90 days and if the rate of increase continued at the same level for two more years, one in four mortgages would be in arrears. He said the law was weighted entirely in favour of the banks.
Fianna Fáil justice spokesman Dara Calleary said there were almost 63,000 mortgages in arrears, averaging about €17,000 with the average loan amount outstanding at just over €196,000. These were not “super houses” but average family home mortgages and it was these families who were taking the pressure he said.
Sinn Féin housing spokesman Dessie Ellis said if the Government had the political will it could immediately introduce assessment of housing need without people having to wait for repossession proceedings where a mortgage was unsustainable.