Banks may be forced to go through an appeals process if they use their veto over state backed insolvency deals.
It is part of a set of proposals being drawn up to overhaul the insolvency system and prevent widespread repossessions.
Other measures include bringing the bankruptcy period down to one year from the current three years.
Advertisement
Just over 110,000 private residential mortgage accounts were in arrears at the end of last year - 14.5 per cent of all accounts.
Personal Finance Editor with the Irish Independent Charlie Weston says the banks will have to justify their actions:
