Irish banks have concluded deals to improve repayment terms for over a third of the more than 100,000 mortgage holders in arrears, a large majority of which should be sustainable, Central Bank governor Patrick Honohan has said.
Around one in five home loans, worth some €23bn combined, are in distress in the country.
A further €11bn of investment property loans are also not being fully repaid following a property crash in 2008.
The Central Bank last year set binding targets to force banks to tackle the crisis.
Mr Honohan gave new figures showing that sustainable solutions had been proposed to borrowers in 48,427 cases of the 108,304 mortgages in arrears over 90 days in July.
Of the proposed cases, 35% of the total number in arrears have been concluded, and 88% of those are meeting the new terms so far, Mr Honohan added.
The Central Bank had ordered the country's six main banks to conclude solutions in 35% of cases by the end of June.
"While the Central Bank has provided recommendations in a number of cases, there is no firm evidence of systemic over-optimism in the solutions designed by the banks," Mr Honohan wrote in a letter to a parliamentary committee that was published on the Central Bank website.
"Therefore there is reason to hope that a large majority of these solutions will be sustained."
In addition, Mr Honohan said legal proceedings had been started against borrowers in 31,170 cases and while some of these should result in restructures, banks had already obtained possession of close to 10,000 properties, just over half of which were voluntarily surrendered rather than repossessed.
Some TDs have criticised banks for relying too heavily on the threat of legal action, and the Oireachtas finance committee recommended that the central bank cease to include legal letters in its list of sustainable solutions.
Rejecting that recommendation, Mr Honohan, who is also a member of the European Central Bank's Governing Council, said some cases would inevitably require recourse to the courts while many borrowers are also still not engaging with their banks.
Mr Honohan added that because restructured mortgages are not treated in central bank figures as performing for some time after terms are agreed, the full impact of the recent concluded deals are not yet visible in the published data on arrears.
In the most recent data to the end of June, the proportion of residential mortgages in arrears for more than 90 days fell for the third successive quarter to 11.8% from a high of 12.9% at the end of September last year.
