The Government has revealed new measures to deal with the mortgage arrears crisis.
Among them is an independent court review that will have the power to approve insolvency deals that have been rejected by banks.
Under the new system, the courts can review and effectively overturn a bank veto.
Justice Minister Frances Fitzgerald said that this was as far as she could go, constitutionally.
"There are constitutional issues that have to be respected as well, in relation to rights on both sides, whether it's property rights for the person who has the mortgage or the creditors," she said.
"So all of that has to be respected.
"What we would hope is that the very fact that you now have a new, independent court review will serve as a powerful incentive to all concerned and to the banks to engage with those who are in this distressed situation and who need solutions."
The mortgage-to-rent scheme will also be extended to deal with most of the 38,000 mortgages that remain in arrears.
However, Clúid head of policy Simon Brooke said that Government changes “won’t make much difference to a scheme that never really got going in the first place.
“The Mortgage-to-Rent scheme has been running for nearly three years at this stage. By now, at least 1500 distressed borrowers could be housing association tenants; safe and secure in the knowledge that they will not lose their home. Sadly, the current total of completed cases is less than 100.”
“The main reason for the scheme’s failure is simply that the banks haven’t taken the scheme seriously.”
David Hall CEO of the Irish Mortgage Holders Organisation gave a cautious to changes to the scheme.
“Increasing the valuation threshold up to €350,000 for the Dublin region is to be welcomed,” he said.
“However we have a grave concern around the funding for mortgage to rent as the current funding model has failed and valuation thresholds for the rest of the country needs to be urgently clarified.”
Finance Minister Michael Noonan said he would not rule out imposing a levy on banks who refuse to cut their mortgage interest rates.
Minister Noonan says he will spend the coming days examining a review conducted by the Central Bank of rates being charged, ahead of a meeting with the main lenders next week.
Some lenders have been accused of ripping off some variable rate mortgage holders by charging them up to 1 percentage point more in order to increase profits.
Minister Noonan admitted the option of a tax or levy on banks who do not comply with demands to cut their rates is open to him in the next Budget.
“It’s an option that’s available to any Minister for Finance for any Budget, and it’s in that context that we’ll look at tax increases or levies,” he said.
“We’ve committed in the Spring Statement not to raise taxes, but we’ll see. The question of a levy is an open question.”
