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DISTRESSED mortgage holders are being investigated by the Central Bank as to how they received their loans in the first place.

It's understood that detailed statements are being taken from homeowners on how the loans were secured during the boom.

These could be used in any court action or inquiry against the mortgage seller.

New Beginning, a support group for families fighting repossession, said that it was "unacceptable that families are living in fear."

The documents, which were revealed by the Irish Examiner, show that the Central Bank has examined mortgage and loan forms drawn up by the Irish Mortgage Corporation (IMC).

One IMC client, who provided a statement to the Central Bank investigators, said she had signed a "deal with the devil" and was approved for a €300,000 loan with her husband.

Both parties were on social welfare at the time and her husband operated a fruit and vegetable stall.

Her husband took his own life last year.