A TWO-year ban on home repossessions should be immediately introduced in place of the one-year system, an all-party body said yesterday.
And it also claimed the State should buy a stake in the homes of people struggling to pay their mortgages.
Any such moves would come as a blow to subprime lenders like Start, which features in many of the repossessions cases before the courts.
A total of 26,000 people have not paid their mortgage in three months or more, recent figures from the Financial Regulator show.
The authors of the report from the Oireachtas committee on Social and Family Affairs say that its recommendations would feed into a cabinet sub-committee tasked with looking at how to help struggling homeowners.
The extension of the moratorium could be done so as to protect the funding position of the lender and the homeowner, they added.
Almost 1,000 repossession orders were issued last year and, just this week, there were 56 repossession applications to the High Court, 30 of which came from subprime lenders.
The new report, which was co-authored by Fianna Fail's Thomas Byrne and Fine Gael's Olwyn Enright, also called for the Financial Regulator's code of conduct to be established as a statutory instrument. Such a move would mean people could take financial institutions to court if they breach the code.
Mr Byrne said people couldn't sue the banks if they breached the repossession moratorium but could only complain to the regulator.
The report also said the Government should look at a scheme that has been set up in Scotland which allows the State to take a stake in a home in risk of repossession. The State would then make financial payments to the lender, reducing a person's monthly payments, but the mortgage holder would retain ownership.
The report also called for a new way of resolving disputes between borrowers and lenders rather than have people going to court, and possibly jail, over unpaid debts.
The report was welcomed by groups like the Free Legal Advice Centre (FLAC) and Focus Ireland.
"This committee has noted the need for an alternative system for handling debt outside the courts, as did the Law Reform Commission last year," FLAC chief Noeline Blackwell said. "FLAC has been calling for such a change for many years."
Focus Ireland said single people who were renting a property also had to be helped out.
The year-long moratorium on repossessions for all lenders was announced by the Financial Regulator earlier this month.
Other recommendations from the Oireachtas report include making lenders pre-emptively contact customers who they think may be at risk of falling into difficulty with their debts. There should also be adequate information on lenders' websites to assist those in arrears and the charging of penalty interest should be banned.
Mortgage indemnity insurance should be paid by banks for all mortgages over 70pc loan-to-value and lenders should give customers a book containing the rights of mortgage holders in difficulty.
Where there had been reckless lending, all debt responsibility should not rest with the borrower but "should be apportioned to the financial institution and, if necessary, the broker who arranged the loan", the report added.