An expert group on mortgage arrears has recommended the introduction of a new Mortgage Arrears Resolution Process to help struggling home-owners.

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Minister for Finance Brian Lenihan said the Government had accepted all of the recommendations of an interim report by the Mortgage Arrears and Personal Debt Expert Group.

The report recommends that lenders cannot apply penalties to borrowers who are taking part in MARP, a framework to be developed by all lenders to handle cases where home-owners are struggling to pay mortgages.

It also says the current Code of Conduct on Mortgage Arrears should be amended to enable the MARP to be implemented.

Lenders should not be allowed to encourage home-owners to switch from mortgage products such as trackers, if it would put them at a financial disadvantage, or encourage borrowers to change mortgage products if it would put the borrowers at a financial disadvantage.

Lenders will also not be allowed to use forbearance measures, or MARP, to move borrowers to less favourable terms.

Lenders are also required to engage in increased and improved communications with borrowers.

All lenders must have a dedicated section on their website for those who get into financial difficulties.

Information about State supports must also be provided to borrowers in distress, and assistance must be given if applying for supports through the MARP process.

Minister for Communications, Energy and Natural resources Eamon Ryan said that the people have helped out the banks and now there is a requirement on the banks to help out vulnerable people who have got into difficulty through no fault of their own.

Mr Ryan said the proposals delivered on a commitment in the Programme for Government to try to reduce the fear and stigma affecting people with debt problems.

Making the announcement, Taoiseach Brian Cowen said it was very important for people to contact their lender once they found themselves in difficulty.

(c) RTE