/ 2021 a long shadow – the need for continued focus on resolving long term mortgage arrears - deputy governor ed sibley 1. reviewing, and revising as appropriate, the waterfall of restructuring options that they have in place with a view to ensuring that a ) they are sufficiently ambitious and capable of delivering sustainable solutions, including for borrowers that are in deep levels of distress ; and b ) when a borrower is offered an alternative repayment arrangement ( ara ), that the ara that is offered from the waterfall has the greatest potential to resolve the borrower ’ s arrears position on an appropriate and sustainable basis ; 2. reviewing and enhancing their approach to dealing with personal insolvency practitioners ; 3. reviewing and updating their contact management strategies, to ensure that they remain fit for purpose in the context of the current level of engagement between firms and borrowers – these strategies should be challenged and signed off by a firm ’ s board, confirming them to be fit for purpose ; 4. keeping their mortgage arrears strategies under review and ensuring that the underpinning plans are delivering effectively, in line with commitments. lenders ’ boards are expected to monitor implementation of the plan, and to obtain formal progress reports ( signed off by senior management ) at least bi - annually. conclusion as i noted at the start of my remarks today, the provision of credit is a critically important function of the financial services system. the functioning of the irish mortgage market in particular is subject to much commentary and debate. this is entirely natural given its importance both to the wider economy and to individuals, as a mortgage typically represents the most significant financial commitment most of us will ever make. while much has been done to improve the functioning of the market, the issue of long - term mortgage arrears remains significant. this is most important for those households and individuals suffering the stress and uncertainty of having significant arrears and being at risk of losing their homes. but there are also wider issues associated with this legacy – including the cost of credit for all, and the attractiveness of the irish mortgage market for new entrants. resolution of long - term mortgage arrears therefore remains a policy priority for the central bank. while recognising that a lot has been done to resolve mortgage arrears, much of it due to the central bank ’ s interventions, for those remaining borrowers in deep arrears, solutions need to be found. today, i have drawn out some of the

proportion of households more than 50 per cent of the total balance can be cleared 56. 8 % less than 50 per cent but more than 0 can be cleared 25. 3 % no mortgage balance can be cleared. 17. 9 % for borrowers who have not engaged with the processes laid out under the code of conduct for mortgage arrears ( ccma ), the risk of loss of ownership through repossession is likely to remain. lenders, borrowers and other stakeholders such as consumer advocacy groups can play a role in increasing rates of engagement, which will increase the likelihood that solutions that retain homeownership can be found. in cases of continued long - term noncooperation, the functioning of the legal system to ensure the realisation of collateral for lenders will continue to be critical to the effective functioning of the mortgage market for all irish citizens, not just those in ltma. it is important to emphasise, that it is never too late for borrowers to engage with their lenders. of the nearly ten thousand concluded pdh possession court proceedings, 21 more than half ( 54 % ) have concluded without a possession order being granted, the majority of these cases ( c. 80 % ) being renegotiated, settled on other terms or with arrears cleared by the borrower. https : / / www. centralbank. ie / news / article / speech - the - need - for - continued - focus - on - resolving - long - term - mortgage - arrears - ed - sibley - 13 - july - 2021 4 / 9 7 / 14 / 2021 a long shadow – the need for continued focus on resolving long term mortgage arrears - deputy governor ed sibley i would therefore again urge anyone in arrears to engage with their lender or the other supports available, like mabs or the insolvency service. borrowers should also pay what they can towards their mortgage – this will help reduce the accumulation of arrears. borrowers who do not engage, and who do not pay anything towards their mortgage, are most at risk of losing their homes. the insights contained in the behind the data paper on repayment shortfalls22 are similar in that there are clearly borrowers in better circumstances than others, and there is no one size fits all solution for the remaining ltma distress. the supervisory data submitted by lenders which underpin this paper do show an even darker picture in terms of borrower afford