Minister for Finance Paschal Donohoe has said he is confident that homeowners will be protected following the announcement by Permanent TSB that it will sell nearly 7,500 mortgages to a so-called vulture-fund.
Yesterday, PTSB agreed to sell its Project Glas loan portfolio to Start Mortgages, an affiliate of the "vulture fund" Lone Star, for around €1.3bn.
The bank said that of the nearly 7,500 owner-occupier mortgages, 2,500 are classified as "not co-operating", adding a further 3,850 accounts have either "refused treatments" or "the account has failed to operate in line with the agreed 'treatment'."
Project Glas also includes 3,300 buy-to-let properties.
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Speaking on RTÉ's Morning Ireland, Mr Donohoe said there is a legal framework in place to protect homeowners, and that that would be robustly adhered to.
He said he was aware of the process to sell the loan book since January, and knew that an announcement was being made yesterday. However, he said he could not intervene in the process.
Mr Donohoe said that the sale of the loan book was driven by the fact that both the Central Bank and the European Central Bank were very clear that if a bank has 25% of its loan book impaired, that figure needs to come down.
He added that he is prohibited from being involved in any issue that is created by guidance given by a regulator or the Central Bank.
In relation to protections for people living in the homes, Mr Donohoe said that if you are a tenant or a borrower, protections in place already would not be affected by who owns the loanbook.
He said more than 127,000 mortgages had been restructured in Ireland, 87% of which have adhered to the terms of the restructuring.
The minister said that all the legal protections that were in place across that period will continue to be in place across the coming period.
Meanwhile, the Chairperson of the Oireachtas Finance Committee has said that the Dáil must be recalled to debate vulture fund legislation, the Affordable Housing and Fair Mortgages Bill, which he introduced and is currently at second stage.
Speaking on RTÉ's Today with Miriam, John McGuinness said it was wrong of Mr Donohoe to say that the protections the borrowers had with PTSB on their loans would travel with the loan to the new lender, saying that this has not been the case.
He also claimed that a significant number of people would lose their homes as a result of this loan sale.
Mr McGuinness said because the Government owns 75% of Permanent TSB, a debate was needed on whether or not this was the "right way to go in Irish society."
He said vulture funds should be stopped from buying loans and said an ethical fund should be set up to buy distressed mortgages to help people stay in their homes on a sustainable basis.
