BANKS should have to prove they've offered mortgage holders in arrears a deal before moving to repossess, the Central Bank has been told.
The Irish Mortgage Holders Organisation has written to Central Bank Governor Patrick Honohan asking for a change in the rules to force banks to apply for a certificate of last resort before moving to repossess.
Fears of a rush of repossessions when the law is amended later this summer prompted the call.
Mortgage support groups maintain that banks have already put procedures in place to start repossessing thousands of homes once the Land and Conveyancing Bill is passed.
Ulster Bank said this week it was preparing to seek to repossess homes, claiming that many mortgage holders were strategically defaulting.
This is where people can pay, but will not pay their mortgage and prioritise other debts instead.
The bank said no payments were being made on 35pc of its mortgages that are in arrears.
Other banks have made preparations to start legal actions against those behind on their payments, according to finance experts.
It is understood that more than 4,000 valuation certificates have been obtained from the valuations office. Banks need to have a current valuation when they go to court to seek repossession.
But the Irish Mortgage Holders Organisation wants to force banks, before taking action, to apply for a certificate of last resort, which would oblige them to prove they have offered those in arrears alternative repayment deals before moving to legal action.
"A massive amount of repossessions will be unleashed upon borrowers," said David Hall of the group.
This meant there was a need for banks planning to launch repossession action to "show clear evidence that this action is genuinely an act of last resort and the bank has exhausted all feasible solutions in attempting to secure a sustainable solution to the mortgage".
In a letter to Mr Honohan, Mr Hall said there was a need to define what exactly was meant by a sustainable solution.
The Central Bank had no comment when contacted.
Meanwhile, tracker mortgage holders have been told not to expect another cut in interest rates.
The European Central Bank (ECB) meets today but is set to leave key lending rates on hold at 0.5pc.