THE cabinet has agreed to establish a group of experts to quickly come back with proposals to help families having difficulties meeting mortgage and other debt repayments.

The group, which is likely to include representatives of Combat Poverty, the Law Reform Commission, the Irish Bank Federation and the ESRI, will examine a range of options open to government in keeping with a commitment in the new programme for government to "protect families having difficulties with their home mortgage repayments".

This will include the possibility of:

* banks taking ownership in homes and leasing back the property to residents with subsequent rent payments being deducted from the loan;

* banks taking equity stakes in houses;

* reduced rates from banks;

* longer maturity dates;

* rolling up outstanding interest.

Green Party minister Eamon Ryan is behind the move to establish the group of experts. "We have debt laws that are not working. They push people into a bankruptcy system that doesn't suit anyone. It's archaic in nature and we need flexible systems where people can get out of the debt problems they have...

"What we also need to do is to help people before they get into difficulty, particularly in the mortgage area where people can see a problem coming either through a job loss or income loss," he said.

The Department of Finance estimates the number of home owners in institutions covered by the bank guarantee scheme is around 15,000. But the total number in arrears could be double that amount.

And Ryan warned the problem is only getting worse. "It can be managed better though if, rather than letting it develop, and let banks get into a foreclosure position, we can put in arrangements that help people get back on their feet and get working again. In the States last February and in the UK they have put in schemes that we think will work well here as well. This is where you push the banks towards being more flexible rather than foreclosing."

House repossessions are still relatively rare in Ireland and there is a view that despite the recession and negative equity, this is unlikely to change as banks under pressure will have no interest in taking further writedowns by repossessing property.

While there is some scepticism in official circles about any new proposals for this reason, the alternative view is that with high unemployment, wage cuts in both the private and public sector and historic levels of indebtedness, some action is necessary and the Greens are determined to press ahead with the introduction of measures, particularly in relation to debt reform.

It is understood the banks are open to exploring new options. They have announc­ed a statement of intent to wait six months before seeking to repossess through the courts the homes of borrowers who have fallen behind on mortgage repayments, as well as promising to be flexible on matters such as deferring payments, extending the mortgage terms and capitalising interest and arrears.