Banks must justify dealings with distressed loan deals

Banks will face scrutiny of their mortgage loan books and will have to justify their dealings with distressed home loan borrowers in the programme for government agreed by Fine Gael and the Independent Alliance.

The programme will be published in detail later this week but the Irish Examiner understands the terms of the agreement are far-reaching and are designed to clean up the mortgage arrears crisis for good.

The document calls on the Central Bank to commission an independent assessment of mortgage arrears on lenders’ loan books in order to bring the level of arrears in Irish banks back to more normal levels.