One of the Special Liquidators of the former Anglo Irish Bank is admitting that a deal they reached on the Code of Conduct on Mortgage Arrears has no legal standing.

Kieran Wallace and other officials from KPMG are appearing before the Oireachtas Finance Committee.

The two final bidders for the loan book held by the Irish Bank Resolution Corporation (IBRC) have agreed on a voluntary basis to adhere to the Central Bank guidelines.

However Kieran Wallace, under questioning from Michael McGrath of Fianna Fail, says the agreement does not mean they will be legally bound to the code.

13,000 Irish Nationwide mortgages are to be sold by the former Anglo Irish Bank and concerns are mounting over the protection mortgage holders will have following the sale.

The Minister for Finance Michael Noonan has ruled out the introduction of legislation for anyone whose loans are sold abroad.

Money Editor with the Sunday Times, Niall Brady, says it is a significant problem.

Yesterday, the bidders for the loan book agreed to abide by the Central Bank Code of Conduct on mortgage arrears if their bid is successful.

An agreement was reached between the bidders and special liquidators for IBRC.

The liquidators said they were aware of the anxieties of mortgage holders, and noted concerns expressed recently by the Minister for Finance Michael Noonan and other members of the Oireachtas.