Probe into how banks deal with mortgage arrears
A major review is to be launched into how banks are dealing with the thousands of mortgage holders who are in arrears.
It follows fears of a wave of repossession cases coming into the courts ahead of the general election next year.
And Central Bank governor Patrick Honohan has admitted that he has concerns that many of the solutions being offered by banks to those in mortgage distress are not sustainable.
This will mean homeowners that take up these offers will end up back in arrears soon after signing up for the deal.
There is concern in Government circles that banks are getting around targets on dealing with arrears set for them by the Central Bank by counting letters sent to those in arrears threatening to take legal action to repossess the home as a "solution".
Banks have been given set targets to meet on the number of solutions they offer under what is known as the mortgage arrears resolution targets (MART).
Figures issued by the Central Bank before Christmas show that half of what is being classed as solutions for those in arrears are made up of threats to repossess homes.
The figures are for the six main banks - AIB/EBS, Bank of Ireland, Ulster Bank, KBC Bank, ACC and Permanent TSB.
Some 100,313 residential mortgage holders in default were offered a proposed solution. But 49,000 of these were issued legal letters, threatening to seek repossession, the regulator revealed recently.
The Central Bank allows the lenders to count legal proceedings seeking repossession as a mortgage solution.
Now there is to be a review by the Central Bank of the targets set for banks to deal with mortgages which are in arrears.
It follows a meeting Taoiseach Enda Kenny had with the Insolvency Service of Ireland last week to discuss the poor take-up of State insolvency deals.
Fianna Fáil spokesman on finance Michael McGrath said banks were applying "sticking plaster solutions" to the mortgage crisis.
In a letter to the TD, Prof Honohan admitted he "continues to have concerns that some restructures offered may not be sustainable".