Careful calibration of measures and a targeted, case-by-case, approach must be the hallmarks of current and future policy for the resolution of arrears problems. While loan modification may be necessary in some cases, there will be adverse consequences for the homeowner – while they may be able to stay in their homes, there will likely be a loss of ownership.
These arrangements must be targeted at those who genuinely cannot make the normal menu of rescheduling options work. 8  BIS central bankers’ speeches  As the Governor of the Central Bank, Patrick Honohan, recently explained, resolution will be effective only if it is guided by clear principles.