In new research on the Irish mortgage market, it has warned that the correction may not yet be over.
S&P said the surge in mortgage arrears in the last few years has reflected a corresponding rise in Ireland's unemployment rate.
This has risen more than threefold since the beginning of 2007- an increase on a par with Spain and Greece.
S&P noted that despite the sharp growth in the number of borrowers who are in arrears for over 90 days, repossessions have not materialised in any significant number in Ireland.
It said that instead lenders are introducing ''borrower friendly'' policies to keep the number of repossessions down. It also noted that although the rate of 180-day arrears was more than six times higher in Ireland than in the UK at the end of 2011, the proportion of loans where the property had been repossessed was similar.
S&P said that while the effect of the upcoming personal insolvency legislation is uncertain, it may accelerate widespread loan writedowns.
