Irish consumers are restricted from the full choice of mortgage products because of extreme limitations in the way title deeds are managed and controlled by the banks. Currently, Irish banks operate as a quasi-cartel in that they hold the consumers' title deeds for as long as they hold a mortgage on the property.

Additionally, banks incorporate a condition which prohibits the creation of a second-mortgage lien on a property on which they hold the title.

As a result, the market for second mortgages doesn't exist here and I would say that this is the last bastion of the absence of choice for consumers in the mortgage market. Just look at the top-up market; it has grown rapidly over the last year. But why do consumers have to go to their existing lender to get a top-up, particularly if there's a better offer elsewhere?

In the current competitive interest-rate environment for example, second liens would allow consumers to go to another lender with a better rate for a top-up mortgage if you didn't want to go to the hassle of moving your entire mortgage. If you want to have one or two or more credit cards, that's your choice. In the Irish mortgage market however, you don't have that kind of choice because of our antiquated system.

But consumers here are becoming more educated and aggressive in the area of re"nancing. They know they can switch mortgages and get better value for money. The last area of the mortgage market now is what we call the top-up/second lien market. It doesn't exist because of blocks. And that's what we need government and the legal system to look at.

In Ireland the bank holds the title deeds and then controls them, which increases transaction costs, decreases competitive choice and results in an immobile system. But in most developed countries title deeds are held independently. We need a government agency that would have a centralised repository of information that would allow lenders to go in and check the number of loans against a property.

This will require legal reform but there also needs to be a move by government to centralise registry of title deeds. There needs to be a movement by government on the recording and maintenance of registry information, so that this becomes centralised, is centrally located and in electronic format. Banks have done very well here, there's no bank in Ireland that isn't pro"table. Now we need to offer consumers real choice. If consumers want a top-up or extra money but don't want to get a personal loan, there should be a competitive and mobile "uid market for that as well.

If consumers want a second mortgage, they, not their bank, should decide what is the best value. And then it should be up to the regulator to decide if we're being compliant on lending to that individual.

In conversation with Brenda McNally