Words but no action from government on mortgage distress – Tóibín
February 20, 2013
Speaking in the Dáil this evening on Sinn Féin’s Private Members’ Motion on social housing and mortgage distress Meath West TD Peadar Tóibín unmanageable mortgages are costing the state money. He said the personal insolvency bill will not make a significant impact and Labour and Fine Gael are providing words but no action.
“Some 23.5% of those with domestic mortgages are in mortgage distress. Most of these homes are in negative equity and so downsizing is not an option. These people are trapped in homes they cannot afford.
“The Central Banks has said that the banks need to do more. Fiona Muldoon has asked, what are the banks waiting for? The governor of the Central Bank has said, if the banks don’t deal with it they will need to extra capital from the state. Yet this problem has doubled in the two years since Labour and FG came into power.
“The personal insolvency bill is not going to make a significant impact as under this system Richie Boucher has said that there is going to be no write-down.
“While more of our citizens slide into debt we have typical Fine Gael and Labour dysfunction; words but no action.
“It is Sinn Féin’s policy to establish an independent statutory distressed mortgage resolution process that can reach a legally binding resolution of mortgage distress on a case-by-case basis. This would protect the family home through a variety of measures including write-downs, shared equity and transferring tenure type to social renting.
“Even if the minister is oblivious to the human suffering and his political ideology is based on the size of his wallet there is a significant benefit to the economy with Sinn Féin’s policy. If you can take a mortgage out of risk, bring the mortgage down to a payable amount, you will actually save money. Unmanageable mortgages cost the state money. The banks are required to raise more capital if they do not deal with distressed mortgages.
“Also the policy of government inaction creates enormous economic problems by literally taking a large section of the population out of the spending economy further depressing the domestic economy.
“A Functional government would direct the banks to deal with the issue in a proactive manner. It would introduce legislation that gives the Central Bank Governor the power to ensure banks passes on interest rate reductions from the ECB. Ensure all Budget-related decisions regarding mortgages are passed on immediately by banks. Ensure that mortgage lenders and inter-bank commercial lenders share a portion of the burden involved in the problem of mortgage distress.”