Irish Housing Minister Michael Finneran has held talks with representatives of the Financial Regulator and the Irish Banking Federation on the issue of mortgage arrears and repossessions.

Mr Finneran said: "At the outset, it's crucial to remember that the most important issue here is the very real trauma of those who experience difficulties in meeting their mortgage repayments.

"For those families, the struggle to make ends meet and the fear of repossession is deeply distressing," he said.

The Minister said it was a key issue to respond to that situation.

The number of repossession orders sought by the Court Service is still much smaller than those entering mortgages in arrears.

"Repossession is by no means an automatic outcome of getting into arrears; for the vast majority of borrowers encountering difficulties with their mortgage repayments, a solution is found through early engagement between borrower and lender," said the Minister.

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According to Mr Finneran, constructive arrears management and engagement between a distressed borrower and a lender is absolutely vital.

He said it was important to stress that the majority of repossession orders do not translate into actual repossessions.

In that regard, the Minister pointed to figures published by the Irish Banking Federation detailing repossession activity by their members in 2008.

This shows that a total of 96 repossessions took place in the 12 month period to end December 2008. Of these, approximately half were voluntary repossessions, and a significant proportion related to investment properties.

"Since December, the Government has taken steps, through the Office of the Regulator to bring forward a statutory Code of Practice in respect of arrears and repossession," said Mr Finneran.

Unlike the previous voluntary Code, this will apply to all lenders - including non-bank lenders.

"While I have concerns about the manner in which some of these institutions approach the issue of repossessions, it is important to note that as a share of the overall market, they account for only around 2% of all mortgages," said the Minister.

The Code came into effect last week.

"I will be continuing to keep the situation in relation to arrears and repossessions under ongoing review," added Mr Finneran.

(PR/JM)