The Keane report says the issue of mortgage difficulty can only be considered on a case by case basis and taking individuals' circumstances into account.
The Government has published the report of an inter-departmental group which has been examining how to help distressed mortgage holders.
As expected, the Keane report (link to PDF) does not recommend blanket debt or negative equity forgiveness but says the issue of mortgage difficulty can only be considered on a case by case basis and taking individuals' circumstances into account.
The report stated that the ''vast majority of mortgage holders can and must continue to meet their mortgage commitments and indeed any other debt obligations''.
It says it would cost about €14 billion to clear the negative equity in the Irish mortgage market, while even a more targeted approach for those who took out mortgages between 2006 and 2008 would cost about €10 billion.
It says that while forbearance is a very 'useful and appropriate solution''in many cases, it is not the solution for all situations. It added that the suitability of such arrangements should be assessed on the mortgage holders' future prospects.
The group, which was chaired by accountant Declan Keane, says that both borrowers and lenders have to recognise that some mortgages are currently unsustainable and that more sustainable solutions will have to be advanced for such cases.
Among the group's possible solutions to address mortgage over-indebtedness included trade down mortgages, split mortgages and sale by agreement.
The report also says that the state has a significant role to play and it proposes the introduction of two mortgage to rent social housing schemes, which will use approved housing bodies and the leasing of houses by banks to local authorities. It also proposes that the mortgage interest supplement scheme should become time limited.
It also recommended that a more specialised mortgage advice service be set up, which could be linked into MABS. It warns that reform of the bankruptcy and personal insolvency laws is fundamental and without this reform the mortgage problem will not be resolved.
The group warned that given the challenging environment, the reality is that some people will lose their home. 'The challenge is to minimise the incidence and consequences of this event,' it added.
The report also warned that further deterioration in the level of mortgage arrears is expected and says the Government should consider early implementation of its recommendations.
''This report sets out important measures to address the problem of mortgage difficulty. It is incumbent on the State authorities and the banks to fully consider these and for the financial institutions to bring forward other innovative solutions which help address this difficult and complex problem,'' commented Finance Minister Michael Noonan.
The report will be discussed in the Dáil next week.
There has been a dramatic rise in the level of mortgage arrears in the last two years and the trend is continuing.
One nine homeowners are in difficulty - either in arrears or have had their mortgages restructured.
According to Central Bank statistics about 45,000 households are in arrears for over 90 days, of which about 32,000 householders are in arrears for over 180 days. About 70,000 mortgage accounts have been restructured.
Responding to the report, building society EBS said it was supportive of the recommendations contained within the Keane report and that it was planning to make the range of options available to relevant customers as soon as possible.
AIB said that the recommendations outlined in the report incorporated a comprehensive response to longer term challenges faced in the area of mortgage financial distress.
New Beginning, a free legal advice service for those facing repossessing, said the report was a disappointment the day before it was published.