Difficult one , we need to try to avoid moral hazard ie letting chancy bankers or house owners off the hook , and we need to serve society not just an economy.
Some views (not necessarily mine)
1. Customer that was originally given 90 to 100% mortgage ,he NEVER really owned the house ,either repossess/sell/ or long term rent according to ongoing means.
2. Customer (now out of work) Should be paying 1000 per month, can afford 500 and is genuine. Let customer pay 500 for 5 years BUT have his mortgage reduced as th ough he WAS paying 1000. After 5 years review/revert, @ worst Bank has lost 60 @500 rather than a repossessed fire sale . It gives Bank&Customer an incentive.
3. Customer owes k300,can,t afford it ,house worth K230. Either come to ongoing arrangement with Bank , or go Bankrupt {not as bad as having an unsustainable drag}
My own view is that the Banks don,t have the bottle to make decisions, the Politicians are being dragged every way. LET THE CUSTOMER make his decision on his current and medium situation as this CANCER is killing people slowly.