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Mortgage debt crisis a factor in rise in suicide – Ó Caoláin

12 July, 2012 - by Caoimhghín Ó Caoláin TD


Speaking on the Personal Insolvency Bill in the Dáil today, Sinn Féin Health spokesperson Caoimhghín Ó Caoláin TD said that the mortgage debt crisis is having a damaging effect on people’s mental health and is contributing to the rise in suicide rates.

Deputy Ó Caoláin said:

“As a Dáil deputy working in my constituency and as my party’s health spokesperson I am very conscious of the serious impact of mortgage debt and consequent poverty on people’s health, especially mental health.

“CSO figures published this week show that the number of recorded suicides in this State rose to 525 in 2011, an increase of 7 per cent on the previous year. The record shows that 439 men and 86 women took their own lives in 2011.

“I have no doubt that the recession and the burden of debt on individuals was a significant factor in the increase. And these are only the recorded figures; the number of unrecorded suicides is much higher.

“People are struggling desperately to pay off the mortgage debts incurred because of outrageous house prices that were inflated by rapacious developers, property speculators, banks and irresponsible so-called regulators. This was the Fianna Fáil property bubble and its legacy is poverty.”

FULL DÁIL SPEECH FOLLOWS

Legislation is overdue to address the huge rate of mortgage indebtedness and the great distress it is causing to people throughout Ireland. This Bill has been long promised and long awaited and its publication saw much favourable comment in the media that gave renewed hope to people in serious distress with mortgages.

My fear now is that false hopes have been created because, while this Bill is a measure of progress, it does not go far enough to address the social and economic crisis that is mortgage indebtedness in this country today.

The stark reality is that families are even going without adequate food in order to service mortgages and keep a roof over their heads. They are in the iron grip of mortgage lenders.

The Irish League of Credit Unions ‘What’s Left’ survey, published on 9 July, shows that 1,820,000 people are left with €100 or less each month after bills are paid. I have no doubt that mortgage debt is a dominant factor in this situation for families and individuals across this State.

As a Dáil deputy working in my constituency and as my party’s Health spokesperson I am very conscious of the serious impact of mortgage debt and consequent poverty on people’s health, especially mental health.

CSO figures published this week show that the number of recorded suicides in this State rose to 525 in 2011, an increase of 7 per cent on the previous year. The record shows that 439 men and 86 women took their own lives in 2011.

I have no doubt that the recession and the burden of debt on individuals was a significant factor in the increase. And these are only the recorded figures; the number of unrecorded suicides is much higher.

People are struggling desperately to pay off the mortgage debts incurred because of outrageous house prices that were inflated by rapacious developers, property speculators, banks and irresponsible so-called regulators. This was the Fianna Fáil property bubble and its legacy is poverty.

The property boom induced a kind of madness. People who could barely manage one inflated mortgage were actively encouraged by banks to take out a second mortgage on investment properties. The delusion was created that by not doing so they were losing out. Unfortunately many people fell for this delusion and are paying the price today.

But the vast majority of people did not participate in the property craze.  They were simply trying to buy a home to live in and they were forced to pay grossly inflated prices because of the greed and the neglect of others. Now tens of thousands of them face penury, possible bankruptcy and the loss of their homes. Thousands have already suffered this fate. To the extent that this Bill may remove or postpone that threat - for some - it is welcome.

Our concern is that it does not go far enough.

At the end of March there were over 116,000 mortgage holders in serious distress. In the first three months of 2012 nearly 100 mortgage holders fell into distress each day.

Also in the first three months of 2012 there was a 28% increase over the last quarter of 2011 in the number of repossessions.

170 families lost their homes in January, February and March this year. That may seem a relatively low number but the increase is ominous and, of course, this is only the tip of the iceberg of distress. Beneath the surface is a mountain of misery for people struggling day in day out to meet crippling repayments.

The range of concerns that we in Sinn Féin have about this Bill have been outlined already and will be addressed as Committee and Report Stage. I urge the Minister to take on board our concerns and those of others who want an improved Bill with a real impact.

FLAC has pointed out that the legislation as it stands still does not impose a legally binding obligation on lenders to accept reasonable applications from customers in arrears; neither does the new bill provide a right for debtors to appeal a creditor's decision in any of its options. These are serious faults in the Bill and they must be rectified.

We recognise that that the Bill provides some additional protection for the family home. A Personal Insolvency Practitioner proposing either a Debt Settlement Arrangement or a Personal Insolvency Arrangement must try to ensure that a debtor can maintain the family home, unless the mortgage is unsustainable or unsuitable.

To what extent will this protect people from losing their homes?

How many people will the Bill’s provisions apply to?

How will they work in practice?

What guidance will people have through the new mechanisms established by the Bill?

These are all important questions. Mortgage holders and their elected representatives will need clear and adequate information on the workings of the legislation.

This Bill, as I have stated earlier, has created a hope and an expectation among many people. Many will look to us, their elected representatives for guidance. I urge the Minister and the relevant agencies to ensure that the process is transparent and accessible and that it is responsive to the needs of citizens.

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