People living in fear of home repossession, says FF's O'Brien Seanad

Families across the country were living in fear of their homes being repossessed, Fianna Fáil Senator Darragh O'Brien said.

“This is ridiculous in a modern society,’’ he said. “The system in place gives the bank a full veto.’’

He told the Seanad Fianna Fáil had argued against the inclusion of the veto in the personal insolvency legislation and, unfortunately, the issue had come home to roost.

“In this city and county, less than 20 applications under the mortgage-to-rent scheme have been approved by lenders and local authorities in the past three years,’’ said Mr O’Brien.

“There has, therefore, been a total failure to grapple with the problem.’’

Mr O’Brien said there was the “ongoing scandal of the rip-off of variable mortgage rate customers’’, adding the Government was only now talking about having a look at the bank veto.

“We do not have time,’’ he added. “People need action.’’

Mr O'Brien said Minister for Finance Michael Noonan should come into the Seanad and outline the Government's plans to remove the veto and ensure people were afforded, at least, the protection of retaining the family home.

Fianna Fáil colleague Paschal Mooney said the Minister should explain why there was an alleged resistance within his department, and among some Fine Gael ministers, to labour TD Willie Penrose's proposal to reduce the bankruptcy period from three years to one year.

“There is not a day goes by that we do not hear of the banks refusing to engage with people who have distressed mortgages,’’ he added.

Mr Mooney said he was not suggesting bankruptcy was the panacea.

He hoped, he added, the Minister would spell out the objections to Mr Penrose’s proposal.

“It seems to me to be a reasonable, sensible and logical proposal, given the nearby jurisdiction and the statistics that indicate there has not been wholesale repossessions as a result of a one-year bankruptcy period,’’ he added.

Fine Gael Senator Paul Coghlan said Mr O'Brien was right to make "a great play'' for the removal of the bank veto.

“We know the banks shovelled out money very irresponsibly to people during the boom years,’’ he added. “In the case of mortgages, loans of 90 per cent or more of the value of the property were given.’’

Mr Coghlan said there was a good case to be made for setting a maximum rate of 2.5 per cent or so for non-tracker customers.