Labour this morning called for a moratorium to be placed on the repossession of homes by banks before the final enactment of the National Asset Management Agency (Nama) legislation.
Speaking during Leaders' Questions in the Dáil this morning, Labour leader Eamon Gilmore said that by the end of next year there would be 35,000 households who would not be in a position to pay their mortgages.
"It is well known that the banks are just waiting for the Nama legislation to go through before they open up in a very serious way to seek repossessions of homes from people who are in serious trouble."
Mr Gilmore told the Taoiseach that Labour finance spokeswoman Joan Burton would be putting forward an amendment to the Nama legislation calling for a moratorium on home repossessions "for a period of time," a move he said was "perfectly reasonable".
Calling for an assurance for homeowners that there would be such a moratorium, Mr Gilmore said: "There are all kinds of arrangements that can be made through the banks . . . it would make more sense from an economic point of view because, ultimately, the State will have to pick up the tab if people are repossessed [sic], and, secondly, from a social and family point of view if people are allowed to stay in their own homes."
Responding, the Taoiseach said it was important to recognise that the level of repossessions of houses was still very low in the State and that there were codes in practice that had to be respected when lending institutions were dealing with those in arrears.
"I would point out that in the Programme of Government we have revised, we have further strengthened our commitments to those mortgage holders who are under pressure due to changed economic circumstances," the Taoiseach said, adding that the statutory code on arrears and recently agreed protocol between the Irish Bankers' Federation and the Money Advice and Budget Service would be further reviewed.
Mr Cowen said the imposition of an across-the-board moratorium raised the question of distinguishing between those who were not in a position to pay and those who did not want to pay, and that there was a need to avoid affecting the funding support for the lending institutions.
However, Mr Gilmore said the Taoiseach's approach was dependent on the goodwill and generosity of the banks, "and whatever disposition the banks may have now to be generous and to respond to the invocations of the Government to deal sympathetically with mortgage holders, as soon as the Nama legislation is passed, as soon as they've got their money . . . they have a free hand, the banks are free to do as they please.
"Unless you put a requirement that there be a moratorium on repossessions [into the legislation] . . . the banks will be free to go after householders with a free hand, and the world and its mother knows that is what they are planning to do. The ESRI estimates there are about 35,000 householders in the country who are in their sights."
The Labour leaders said that as the Taoiseach was going into social partnership talks, "the first thing you need to put on the table . . . is to say to people that there will be a guarantee that people are not going to lose their homes".
Mr Cowen said the Nama legislation was not about giving a free hand to anybody but was about creating a viable financial system that could provide mortgages and ensure that funding arrangements for banks were sufficient so those getting into repayment difficulties could be dealt with sympathetically.
