A lobby group, which represents distressed borrowers, is working on a plan to purchase 15,000 mortgages from the banks.

It is understood New Beginning's proposals focus on offering the homeowners, who currently face repossession, the option to rent their homes instead.

The distressed borrowers would then have the option to repurchase their homes if their circumstances improve in the next seven years.

The proposals have been backed by Fine Gael TD Regina Doherty, who has raised the matter with Minister for Finance Michael Noonan. 

New Beginning plans to pay for the mortgages by using a Maltese-registered company, which would pay the banks with a bond and an annual coupon or interest rate repayment.

After seven years, New Beginning would plan to sell the homes to the tenants or sell the properties to an investment vehicle, which would continue to let them to the tenants. 

It is understood it has hired PriceWaterhouseCoopers, and stock broking company Davy have acted as advisers on the project.

Any deal would require the agreement of the banks to sell the mortgages to New Beginning's company. 

The organisation is planning to open discussions with the banks in the coming weeks.