Ratings agency Moody’s says debt write-down is the only way to fix the Irish housing market.
It has published a far-reaching report on residential mortgages here.
It says the mortgage crisis will only peak next year.
It is also suggesting that 1-in-5 homes will then be in default.
The study looked at €66 billion worth of home loans here not including buy-to-let properties.
It says it expects that the mortgage arrears crisis will peak next year and will see 20% of all mortgages in arrears.
That compares to the latest figures from the Central Bank which put arrears at just 10.9%.
The rating agency claims from April to July the 90-plus day delinquency trend and 360-plus day delinquent loans reached a new peak.
It says they rose steeply to 15.19% from 13.99% and to 6.58% from 5.50% respectively.
The paper says Irish house prices have already fallen by 50.3% between September 2007 and July 2012 and it expects that they will fall a further 20% from the levels seen today.
Karl Deeter is from Mortgagebrokers.ie
He says that unpalatable as it is it is the only answer.