Vulture funds have received a massive blow in their attempts to repossess homes.
It has come about because a second lender was forced to admit it was incorrectly calculating arrears levels on mortgage accounts.
This latest admission sees Tanager forced to withdraw legal proceedings against a number of property owners in arrears.
The development is set to cast doubt over future moves by Tanager to take repossession actions against those behind on their repayments.
It comes just two months after subprime lender Start Mortgages had to stop repossession proceedings after it emerged it has been miscalculating the arrears on accounts.
Tanager, a US fund that bought Bank of Scotland mortgages, is now recalculating how it works out arrears on accounts.
Owned by Apollo in the United States, Tanager snapped up more than 2,000 distressed home loans from Bank of Scotland Ireland in 2010.
Financial experts said other funds that bought mortgages were now likely to be forced into admitting they have been miscalculating arrears levels, which will force them to withdraw repossession cases.
In letters sent to mortgage holders, Tanager, through its mortgage servicing agency Lapithus, has had to change how it calculates arrears.
Up to now it has been adding the arrears amount to the overall mortgage balance, so-called arrears capitalisation.
This inflated the monthly repayments.
In a letter to one mortgage holder, Lapithus/Tanager stated that the way it was calculating the arrears led to higher monthly repayments.
It will change its calculations, which will reduce the arrears owed.
"As your arrears balance will reduce as part of this change, Tanager has decided to withdraw its legal proceedings against you," it said.
Tanager said it would apply to the circuit court to have the repossession proceedings withdrawn and would cover any legal costs incurred by the mortgage holder.
Consumer advocate Brendan Burgess, of the Askaboutmoney.com website, said that the development raised questions about Tanager's ability to undertake future repossession actions.
He also said there were now question marks over past repossession cases taken by the vulture funds.
"All repossession cases should be struck out because Tanager calculated the arrears incorrectly," he said.
A spokesperson for the Central Bank said it was aware of the issue.
Tanager said: "Following a review of its practice for recalculating a customer's constant monthly instalment payment for customers who are in arrears, Tanager DAC is updating this practice."
It said it was implementing changes to its processes and would notify customers affected by the end of January.
A spokesman for Tanager/Lapithus said repossession cases had been dropped where the revised arrears amount was substantially reduced, impacting less than 30 customers.
He insisted that nobody lost their home as a result of the miscalculation of arrears, but there were a small number of investment properties that were being examined.