The Government has published the report of an inter-departmental group that has been examining how to help distressed mortgage holders.
The report does not recommend blanket debt or negative equity forgiveness but says the issue of mortgage difficulty can only be considered on a case-by-case basis and taking individuals' circumstances into account.
The report stated that the "vast majority of mortgage holders can and must continue to meet their mortgage commitments and indeed any other debt obligations".
The group, which was chaired by accountant Declan Keane, says that both borrowers and lenders have to recognise that some mortgages are currently unsustainable and that more sustainable solutions will have to be advanced for such cases.
Among the possible solutions to address mortgage over-indebtedness were trade down mortgages, split mortgages and sale by agreement.
The Keane Report also says that the State has a significant role to play and it proposes the introduction of two mortgage-to-rent social housing schemes, which will use approved housing bodies and the leasing of houses by banks to local authorities.
It is estimated the cost of the scheme would be €35m annually to the State.
It also proposes that the mortgage interest supplement scheme should become time limited.
It recommended that a more specialised mortgage advice service be set up, which could be linked into MABS.
There is a warning that given the challenging environment, the reality is that some people will lose their homes.
The report also warned that further deterioration in the level of mortgage arrears is expected and the Government should consider early implementation of its recommendations.
Minister for Finance Michael Noonan said the report sets out important measures to address the problem of mortgage difficulty.
"It is incumbent on the State authorities and the banks to fully consider these and for the financial institutions to bring forward other innovative solutions which help address this difficult and complex problem."
The report will be discussed in the Dáil next week.