Feb. 9 (Bloomberg) -- Andrew Healy, chief executive of Danske Bank A/S’s National Irish Bank unit, said planned Irish personal insolvency laws won’t lead to “wholesale” mortgage debt forgiveness.
While Moody’s Investors Service said yesterday that 25 percent of mortgage debt could be written off in the “unlikely event that all negative equity mortgage debt” was written off, Healy said in a phone interview today that it’s “clearly unrealistic” to write off negative equity in the market.
“We have yet to see the full legislation, but it’ll crystalize unsustainable situations, which is necessary and quite positive,” Healy said. “Any writedowns will have to have 75 percent support from banks and repayment ability will be the key determinant.”
Healy said though real estate prices will fall further, the declines would not be as “dramatic” as in recent years.
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