The Money Advice and Budgeting Service has welcomed the statement of intent by ten Irish mortgage lenders to give homeowners more time to tackle arrears before taking legal action.
One in three people currently contacting MABS is experiencing difficulty with mortgage repayments.
Michael Cullotty of MABS has urged people to contact his service or their mortgage lender as soon as they realise that meeting their monthly repayments is difficult.
The Irish Banking Federation has said that customers who are unable to maintain mortgage repayments will be offered arrangements on a six-monthly basis, with no legal threat of repossession during this time.
The move has also been welcomed by the independent Free Legal Advice Centres (FLAC).
Under the current statutory code of conduct, lenders must wait six months from the time the arrears first arise before beginning legal action for repossession.
In the case of the two recapitalised banks, AIB and Bank of Ireland, the moratorium is for 12 months.
Today's statement of intent from the ten banks and building societies represented by the IBF says that the period of grace will be extended by at least another six months if the customer enters into dialogue with the lender.
The lenders say customers who are genuinely unable to meet repayments on their principal private residence will be offered arrangements, which would be reviewed every six months.
If the customer sticks to this, no legal action will be taken against them in relation to their mortgage.
The IBF insist house repossessions remain at a low level in Ireland.
It says 70 houses have been repossessed by the main lenders so far this year, of which 49 were voluntary or abandoned and 21 were the result of legal action.
Statement of intent
The statement of intent read as follows: 'All mortgage lenders who are members of the Irish Banking Federation (IBF) are fully committed to working with customers who are facing repayment difficulties in their principal private residence due to changed economic circumstances.
'While it is important to always make the distinction between customers who are unable to pay their mortgage and those who are unwilling to pay, IBF mortgage lenders have as their goal to work with their customers who face genuine difficulties in order to find solutions that do not involve legal action.
'The basis for such solutions is for the customer to talk to his/her lender at the earliest opportunity so that a mutually-acceptable arrangement can be agreed, implemented and reviewed thereafter on a six-monthly basis.
'Provided the customer maintains this arrangement, IBF mortgage lenders will not initiate any form of legal action against them in relation to their mortgage.
'An IBF Oversight Committee, with representation from the Money Advice and Budgeting Service (MABS), will monitor the application of this Statement of Intent.'
