Vulture funds have done a U-turn and are now prepared to agree mortgage-to-rent deals, it has emerged.
For years, they were accused of only being interested in seeking repossessions.
But Home For Life, a privately funded mortgage-to-rent company, says vultures are now engaging with it.
Home For Life offers mortgage-to-rent deals in conjunction with State bodies.
The mortgage-to-rent idea has been criticised due to a poor take-up, with heavy bureaucratic burdens blamed for low numbers getting approved for it. Just over 500 mortgage-to-rent deals, approved by State bodies, have been done in seven years.
However, a change in the eligibility criteria announced by Housing Minister Eoghan Murphy in July, and the fact that vulture funds are now prepared to sanction deals, means thousands of heavily indebted people could now benefit from the concept.
Under the scheme, a property is sold to a provider like Home For Life and then leased back to the State through the local authority.
The homeowner's residual debts are written off. The family then becomes a tenant of a local authority, paying an affordable income-based rent. Chief executive of Home For Life Paul Cunningham said his company had just completed its first tranche of 17 mortgage-to-rent deals with Permanent TSB and investment fund Prematoria. There are another 450 cases in the pipeline.
"We see significant numbers coming through," he said.
"Funds were not doing mortgage-to-rent, as it was seen as taking a long time and was deemed to be expensive.
"But funds now see it as a strategy to get rid of distressed loans. Funds realise the courts don't work, so they are prepared to look at other solutions."
Mr Cunningham said the scheme had "now taken off massively", and there was what he described as huge buy-in from mainstream banks and funds that have bought portfolios of distressed loans.
Home For Life, which is funded by AIB, expects up to 10,000 families to avail of mortgage-to-rent schemes in the next few years.
Some 28,000 homeowners are at high risk of losing their properties as they are more than two years in arrears.
Brian Hayes, the chief executive of the Banking and Payments Federation, the umbrella body for banks, said changes to the eligibility criteria for mortgage-to-rent meant there was greater take-up of the scheme.
He appealed to those with unsustainable debts to engage with their lenders.
Mr Hayes said recent Housing Agency figures show there have been 4,700 applications for State-assisted mortgage-to-rent deals since 2012. Some 527 cases have been completed. Another 1,058 are being actively considered, he said.