Statement from Seamus Healy TD 087-2802199
There is a special category of up to 30,000 low-income distressed mortgage holders who do not have sufficient income to enable them to avail of the personal insolvency procedure put in place by the government.
Labour has abandoned them to repossession and eviction. The Irish people have a long history of resisting evictions. Workers and Unemployed Action, in accordance with this noble tradition, will support these families in resisting repossessions and evictions.
On December 3, at Leaders Questions in the Dáil, I asked the Tánaiste and Labour Party Leader, Eamonn Gilmore, the following questions:
(1) Last week the Taoiseach refused to answer my question on the issue but he repeatedly stated that there is a solution for everyone in mortgage distress. 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 and have modest mortgages that are not buy-to-let properties, who are not strategic defaulters – will the Tánaiste ensure that these families will be allowed to remain in their homes?
(2) 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. 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?
Mr Gilmore did not answer either question but continued to assert that these families do not face repossession despite the evidence. He expressed meaningless wishes such as: “We want every family and householder in mortgage difficulty to have that difficulty resolved and to avoid up losing their home” He said that each distressed mortgage would have to be dealt with “on a case by case basis”. He is clearly refusing to take any action to protect this special category of low income mortgage holders. His “case by case basis” places the individual mortgage holder at the tender mercy of the banks.
My question was based on a Report by the company Grant Thornton Debt Solutions which showed that thousands of distressed mortgage holders, unemployed or lowly paid, did not have sufficient income to avail of the Personal Insolvency procedure put in place by the government. This is because their income is below the minimum permitted living expenses for their household and consequently have no money to give to the bank each month. An interview with Michael McAteer, senior partner with Grant Thornton, can be heard by clicking here.
Mr McAteer makes clear that the only option for these low income families is to seek bankruptcy. Under bankruptcy law, which has recently been revised, ownership of all assets of the bankrupt person including the family home are transferred to the Official Assignee for the benefit of the creditors (the bank). In the last 12 months, Mr Gilmore’s government has removed the absolute ban on repossession of the family home. The Government has also reduced the one year delay before a bank can take legal action for repossession against a person who can’t pay a mortgage to a mere two months.
Mr Gilmore and the Labour Party have removed the protections for unemployed and low income distressed mortgage holders. They are clearly on the side of the banks.
The Irish people have a long history of resisting evictions.
Workers and Unemployed Action, in accordance with this noble tradition, will support these families in resisting repossessions and evictions.
Seamus Healy TD
Deputy Seamus Healy: 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—–
An Ceann Comhairle: The Deputy is well over time.
Deputy Seamus Healy: —–and have modest mortgages that are not buy-to-let properties, who are not strategic defaulters—–
An Ceann Comhairle: The Deputy should put his question please. He is way over time.
Deputy Seamus Healy: Will the Tánaiste ensure that these families will be allowed to remain in their homes?
The Tánaiste: 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.
Deputy Seamus Healy: 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.
An Ceann Comhairle: I ask the Deputy to put his question.
Deputy Seamus Healy: 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?
The Tánaiste: 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.
Deputy Seamus Healy: There is a particular group.
The Tánaiste: If the Deputy has a particular case in mind, he should let me know.
Deputy Seamus Healy: There is a group of 30,000.
The Tánaiste: There is not. At the beginning, the Deputy said there were 30,000 families facing eviction. There are not.
Deputy Seamus Healy: There are.
The Tánaiste: There are not.
An Ceann Comhairle: Deputy Healy has had his say. I ask the Tánaiste to speak through the Chair.
The Tánaiste: 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.
Deputy Seamus Healy: The group does not qualify for the arrangements, as the Tánaiste knows.
An Ceann Comhairle: We have exceeded the time allowed.
The Tánaiste: 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.
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