UP to 20,000 homeowners are two years or more behind on their mortgage repayments, new official figures show – the equivalent of the population of Kilkenny city.
These people have no hope of keeping their homes unless they can secure write-offs of large chunks of their debts, mortgage experts said.
And AIB and its subsidiary EBS are the only banks that have said publicly they are willing to look at forgiving some of the mortgage debt of those who can no longer meet repayments.
Other lenders could force many homeowners to eventually give up ownership of their properties.
For the first time, the Central Bank has broken down the figures to show the length of time people have been in arrears.
The statistics show a rise in overall arrears and that 19,541 mortgage holders have built up two or more years of arrears.
Even if these mortgage holders voluntarily give up their homes, they are expected to have to apply for a debt deal under the new insolvency process.
The new regime will allow for the formal write-down of debt, over a five-year period, without having to go to court to be declared bankrupt.
There are now a total of 180,000 residential mortgage holders – one in four – who are either in some form of arrears or have had to get agreement from their bank to pay less each month. This is up from close to 170,000 in the summer.
Banks have been repeatedly told by the Central Bank to step up their engagement with troubled mortgage holders.
Some banks have yet to launch deals like split mortgages and mortgage-to-rent schemes.
A split mortgage is where some of the mortgage is set aside and capital and interest repayments are only made on a portion of the debt.
Meanwhile, Taoiseach Enda Kenny has condemned as "scaremongering" claims by opposition politicians that plans to amend the law on mortgages will lead to a "rash of house repossessions".
It comes after the EU/ IMF troika overseeing the bailout called on the Government to amend the law to remove legal impediments dating back to 2009 that block banks from seizing houses over unpaid home loans.
The troika wants "legal clarity to the procedure" for repossession, not a change in the number of foreclosures, the Taoiseach said.
The statutory rights as lenders of banks in Ireland are well established, he pointed out.
The Government appreciates the importance to Irish people being able to keep their home, he said.
The call to fix the loophole identified by Justice Elizabeth Dunne is included in the latest troika update to the terms of the Irish bailout.