Elderfield: Carefully targeted debt relief welcome

The deputy governor of the Central Bank, Matthew Elderfield, welcomed recent announcements by the pillar banks that long-term loan modifications would form part of the range of solutions to the mortgage arrears crisis.

“It is encouraging to hear more than one bank CEO acknowledge that, while repossessions will inevitably rise significantly, for co-operating owner- occupier borrowers there will also be a step-up in the volume of cases of long-term loan modification — carefully targeted debt relief if you like.”

His view was echoed last night by Finance Minister Michael Noonan who said he envisaged the emergence of what he termed a ‘menu’ of possible solutions for those in mortgage arrears to include interest-only payments and other methods of relieving the burden on distressed borrowers. However, he drew a sharp distinction between “those who can’t pay and those who won’t pay”, saying the latter faced repossession.