Central Bank urges more proactive approach to mortgage arrears

The Central Bank is set to increase pressure on banks to adopt a more proactive approach to deal with the growing problem of mortgage arrears amid warnings that household financial distress has reached “unprecedented levels” in Ireland.

The governor of the Central Bank, Patrick Honohan, said the scale of the problem was highlighted by the extraordinary rate of arrears on mortgages for owner-occupied homes.

However, he argued debt forgiveness should only be considered in cases of over-indebtedness “involving or bordering on insolvency”.