The not-for-profit firm says that attitudes have changed in recent months, with lenders taking an increasingly firm stance with borrowers who are struggling to meet their monthly repayments.
It says that the number of arrears repayment proposals being rejected by lenders has increased, particularly from firms who are no longer actively lending in the sector.
Customers who have lost their jobs are finding lenders particularly tough, with Luke Memory, chief executive of Revival, saying that government should step in and help those in trouble.
“We do see cases where the borrower has negative equity, is out of work, and is completely unable to demonstrate affordability.
“I think that we are approaching a time when there will be new case law on these types of cases where it would be better for the government to step in and turn a mortgaged home into a council house.
“This is what the Mortgage Rescue Scheme was designed to do but didn’t. Otherwise the likely scenario is thousands of people will be made homeless and forced into social housing, which costs the government a significant amount of money.
“I can say with certainty that lender attitudes towards forbearance for distressed borrowers have hardened in recent months.”