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.
The Independent Alliance-Fine Gael agreement to set up a court and debt resolution and mortgage arrears agency aims to create “a framework that removes fear and brings predictability to the process”, according to a source.
Central Bank figures show that 88,292 — or almost 12% of all mortgage accounts in the State — were in arrears at the end of last year. A huge total of 120,739 accounts has been “restructured”.
Paul Joyce, senior policy analyst at Flac — the Free Legal Advice Centres — welcomed the plans.
“For a long time we have called for a system outside the courts to deal with mortgage arrears,” he said.
“What is disturbing” is the ease with which capitalisation of mortgages is being offered to borrowers, Mr Joyce said.
Master of the High Court Edmund Honohan will today tell the new Oireachtas housing committee it must act now to tackle distressed mortgages and the compulsory purchase orders of homes.