Mortgage lenders are scrutining applicants' employers more closely than their salaries to safeguard against the risk of default on home loans, Ireland's leading mortgage expert has said.

Michael Dowling, a director of the Independent Mortgage Advisers Federation (IMAF), whose record of predicting the housing market during both the boom and bust years has been among the most accurate, said that banks worry as much about whether or not the employer of the applicant will remain in business as they do about the borrower's means to fund the mortgage.

The two big lenders, Bank of Ireland and AIB, which now dominate the home-loans market, continue, however, to lend to public sector workers because they know that even under any IMF-inspired bailout and reform of the public sector, workers would receive redundancy payments to help cover their home loans.

"You have to have secure employment and the criteria is getting harder," said Dowling.

"If you are not a civil or public servant or work for a major recognisable company like Vodafone or O2, you are having to explain who the company is and its financial strength. If the mortgage broker submits an application for a person who works for a company that no one knows anything about, the first thing the lender is going to do is search the company register – to check out the company as much as the borrower. They spend as much time researching the company, as they do the mortgage applicants' means," he said.

The lenders, which call the spot checks "sustainability of employment", want to safeguard against the risk of sudden unemployment as more private companies run into financing difficulties during the recession.

"Guards and anyone in the public or civil work force are still getting mortgages because there are no fears yet of big job cuts in the public sector. Would that change in a sovereign bond crisis? The banks would still view the state employee as a very good bet. If a package comes out for redundancy there is money to pay back the mortgage loan," said Dowling.

But Dowling, who has secured a reputation as a frank commentator of the difficulties facing mortgage borrowers, questioned the fears raised by UCD Professor Morgan Kelly who, in an Irish Times article last week, inferred that 200,000 households could face defaulting on their home loans.

As reported by the Sunday Tribune early this year, the quarterly figures issued by the Financial Regulator severly understate the level of mortgage distress in Ireland because they do not include an estimated 50,000 households who the bank lenders have switched to interest-only payments, or have had their repayment terms altered in other ways, because they are struggling to meet their monthly payments.

"There are probably around 100,000 mortgages which are in default and in so-called forbearance. I agree with a lot of what Morgan Kelly says and I agree in principle with what he says but to assume that 200,000 mortgage holders are going to default is a bit excessive," he said.