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Government’s half-hearted, milk and water efforts not good enough for distressed mortgage holders – Ó Caoláin

20 October, 2011 - by Caoimhghín Ó Caoláin TD

Speaking in the Dáil today on Keane report on distressed mortgages Sinn Féin TD Caoimhghín Ó Caoláin has said there is huge moral obligation on the state to move heaven and earth to help those who, through no fault of their own, have been plunged into mortgage slavery. Deputy Ó Caoláin said instead what the Government has come up with is half-hearted, milk-and-water measures or no action at all.

Full text of Deputy Ó Caoláin’s address follows:

“There is a mortgage crisis in Ireland and no-one can see clearly where or when it is going to come to an end.

“One thing is certain, if it is not addressed comprehensively, effectively and very soon, many more people are going to be forced into poverty and homelessness. We will see more repossessions of homes. We will see more families forced to make the choice between paying the mortgage and buying food or essential medication.

“Throughout this country families are looking forward to the festive season not with anticipation but with trepidation.

“We have now, for tens of thousands of families, what can only be called mortgage slavery. Houses and apartments purchased at grossly inflated Celtic Tiger prices are now in negative equity but the purchasers are chained to massive mortgages that swallow up their incomes.

“The consequences for individuals and families are devastating. The consequences for the wider economy and society are deeply damaging as disposable income disappears into the black hole of mortgage debt.

“This is a direct result of the deliberate inflation of the property bubble by Government and the free-for-all unregulated market in land, property development, construction and loans which prevailed in that era of madness known as the Celtic Tiger. Many people were taken in and understandably so. It seemed that for tens of thousands of young people the once-in-a-lifetime opportunity to get on the so-called property ladder had come and they grabbed it with both hands. The regulators who should have protected them were negligent in the extreme.

“Given that background there is a huge moral obligation on the State to move heaven and earth to support those who, through no fault of their own, have been plunged into mortgage slavery. Instead, what do we find? We find half-hearted milk-and-water measures or no action at all.

“The Keane Report is a bitter disappointment. Once again it’s a cringing approach to the banks, a genuflection to the board-rooms where many of the grossly over-paid culprits are still in positions of power.

“The Report rules out increasing mortgage supplement. It rules out extending mortgage interest relief. A legally empowered personal debt management agency is ruled out. There is nothing to protect mortgage holders from ECB interest rate rises. In fact, there is little or nothing to protect mortgage holders at all.

“Yet the Fine Gael/Labour Programme for Government tells us that on 25th February 2011 “a democratic revolution took place in Ireland”. It speaks of “a new hope” that “a new Government guided by the needs of the many rather than the greed of the few can make a real positive difference in their lives”. I presume these stirring words were inserted by the Labour drafters. But these words turn to dust when you see what precious little hope is offered to people in mortgage slavery today.

“It is not for lack of positive and constructive proposals from many quarters to address this crisis. The new Government invited such proposals but has paid scant attention to them.

“From the beginning we in Sinn Féin have called for thorough and radical measures. This was reaffirmed at our party’s Ard Fheis last month in Belfast when we pointed to the rapidly growing number of mortgage holders in distress and the serious impact of mortgage distress on families, local economies and the financial stability of the country.
We called unanimously for the establishment of independent statutory distressed mortgage resolution processes in both jurisdictions in Ireland, the purpose of which would be to:

• reach a legally binding resolution of mortgage distress on a case by case basis
• protect the family home through a variety of measures including loss sharing, shared equity and transferring tenure type to social renting
• enable those unable to remain in the family home to downsize or transfer to more sustainable mortgage arrangements via short sales or property/mortgage swaps
• protect the taxpayer by ensuring that mortgage lenders and inter-bank commercial lenders share a portion of the burden involved in the problem of mortgage distress
• implement the Law Reform Commission’s recommendations on the reform of the bankruptcy laws to enable people to have a fresh start if formal bankruptcy is the only way of addressing their mortgage distress.

“These are real and concrete and far-reaching proposals. Of course to introduce and implement them would require “an unprecedented level of political resolve” and “strong, resolute leadership”. Are the Fine Gael and Labour members familiar with those words? They should be. Again, they are taken from their own Programme for Government.
But the Government doesn’t have to begin by implementing the Sinn Féin proposals. They could at least start to implement their own commitments in the Programme for Government. Let me remind them what they were:

• Increase mortgage interest relief to 30% for First Time Buyers in 2004-08
• Introduce a two year moratorium on repossessions of modest family homes where a family makes an honest effort to pay their mortgage.
• Fast-track personal bankruptcy reform
• Convert the Money Advice and Budgeting Service into a strengthened Personal Debt Management Agency with strong legal powers
• Make greater use of Mortgage Interest Supplement to support families who cannot meet their mortgage payments.

“Why has no action been taken to implement any of these commitments?

“Do the Members opposite realise the scale of the crisis?

“Financial Regulator figures show that 55, 763 mortgages were in arrears for more than 90 days at the end of June 2011.

“69,837 residential mortgages are categorised as restructured including interest-only payment plans. Of these 30,442 are also in arrears.

“95,158 residential mortgages in all are in arrears of over 90 days or have been restructured. This represents 12% of residential mortgage holders in some form of mortgage distress.

“Rent supplement claims have increased from 63,658 to 96,809.

“Mortgage interest supplement claims have increased from 5,212 to an incredible 18,564.

“And nearly 100,000 families are on social housing waiting lists, twice the number in 2008.

“This is not just a mortgage crisis, it is a full-blown housing crisis.

“If the Government introduces effective measures to address this crisis and support families and individuals then we will fully support them. If they fail to do so we will continue to pursue them until they take the urgent and extensive action that is now so desperately needed.”


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