BANKS stand accused of targeting the more "responsible" mortgage defaulters for repossessions, ahead of those in huge arrears.

It is claimed that distressed homeowners with equity in their homes and who talk to their bank are more likely to be targeted for repossessions.

Stricken borrowers who still have value in their homes are more likely to lose their home to the bank.

But those in negative equity are more likely to be given a debt deal, according to a leading support organisation for borrowers.

The New Beginning group, which deals with 50 new repossession cases each month, claims evidence from its client base suggests this pattern of action by the banks.

People who have equity in their homes, often as a result of sustained payments over the years, may find themselves facing repossession by banks eager to reclaim that value.

"We are in danger of creating a system in which those who are behaving themselves get the worst treatment and those who are behaving badly are apparently rewarded," said Ross Maguire of New Beginning.

Mr Maguire said that about 20pc of New Beginning's clients have equity in their homes.

Bank activity has focused increasingly on these people in the past eight weeks, he added.

New Beginning's claim is also backed by Bankcheck, a firm which checks mortgage records on behalf of Irish borrowers who have found themselves in difficulty. Bankcheck director Eddie FitzPatrick: "The banks have become very aggressive in recent weeks and they do appear to be pursuing the borrowers who have cash – that means those in positive equity."

CAMPAIGN

Homes which have a market value greater than the loan amount owed are usually considered to be the low-lying fruit for banks on a repossession campaign.

This has been the case in other economies where property crashes have occurred, including the UK.

Here the Central Bank set strict targets in March demanding that lenders sort 20pc of their arrears cases by the end of this month.

Thanks to the recently revised Mortgage Arrears Code of Conduct, lenders can begin repossession proceedings after three months when previously they had to wait for a year.

A spokesman for the Irish Banking Federation said: "Repossession is not about positive or negative equity – it's about a mortgage that has become totally unsustainable. It will arise only where all efforts to maintain a sustainable mortgage have failed."

Irish Independent