The head of the Irish Mortgage Holders Association has criticised an agreement between MABS, the state backed Money and Advice and budgeting Service, and the Banking and Payments Federation on how to resolve disputes between lenders and distressed mortgage holders.

David Hall said the agreement was nothing new and, "offered nothing concrete and not one solution to help mortgage holders".

Several Credit Serving Firms, which manage properties and portfolios on behalf of vulture funds, have been the subject of much controversy for how they handle home repossessions.

The agreement reached includes AIB, Bank of Ireland, EBS, Haven, KBC, Lapithus Management DAC Leeds Building Society, Link Asset Services, Pepper Asset Servicing permanent tsb, Start Mortgages and Ulster Bank.

The agreement sets out how the lending institutions and funds will engage with MABS on behalf of clients.

It sets out agreements on the transfer of documents, disclosure of information, how to deal with "vulnerable" customers, and also agreement to set up face-to-face meetings with MABS in some cases.

David Hall said the agreement was an effort to divert people away from long-term tangible solutions to short-term solutions which he said, "will ultimately do them damage".

Mr Hall said that vulture funds are regulated, and are already required to comply with the code of conduct on mortgage arrears, and he said "we have always been told that vulture funds are the same as banks and consumers have the same protections", so he questioned why the agreement was needed.

He said the agreement had been published at what he called, "a curious time", he claimed that the Central Bank is currently in the process of looking at vulture funds in the context of solutions they are providing.

Mr Hall said vulture funds should provide sustainable solutions and he said the document published today, "does not offer one solution".

The Banking and Payments Federation said that the agreement makes clear to all lenders their obligation to help progress applications that come from MABS clients.

Its Chief Executive Brian Hayes said he hoped the agreement would give some clarity to people in difficulty with their mortgages.

Mr Hayes, said there is still a very difficult situation facing up to 28,000 people who find themselves in mortgage arrears lasting longer than two years.

He said a "solution has to be found for those people in a sympathetic and understanding way".