The governor of the Central Bank Patrick Honohan has again criticised the concept of mortgage "strategic default" and defended the use of repossession as a tool to deal with mortgage arrears.
He said the term "strategic default" came from the American mortgage market, and he found its use in Ireland "value loaded" and "inauthentic".
He described it as "a rhetorical use which obscures the diversity and complexity of arrears circumstances".
Prof Honohan said he prefers to characterise the persistent surge in mortgage arrears in Ireland as a variety of "wait and see" behaviour.
However, he described "wait and see" as neither a "safe or viable plan for the borrower, or for society, and clearly calls for corrective action."
This includes repossession, which he said must be part of the solution for mortgage arrears.
"The whole mortgage concept depends on the lender having the ability to recover the collateral; not every loan can be modified: repossession has to be an option".
Prof Honohan said the scale to which the unresolved mortgage arrears situation has grown in Ireland reflects the absence of immediate consequences for non-payment.
He said "resolving the mortgage arrears problem is not just a question of modifying unbearable debts. It also requires action to end the procrastination of those whose situation is not unsustainable, including moving to repossession if necessary."
Prof Honohan made the comments in a speech to the Society of Actuaries in Ireland.
The level of mortgage arrears in Ireland is far higher than was assumed at the time of the bank stress tests in 2011.
As the Central Bank prepares for a new set of stress tests Prof Honohan said that, compared with their 2011 model, house prices had fallen faster than they assumed they would.
However he said the average house price has stabilised and now stands about 10% above where the 2011 process assumed they would be.
