Minister for Finance Michael Noonan has claimed that banks are only taking repossession cases against homeowners so that they can talk to the borrower.
Michael Noonan was responding to news that more than 7,000 repossession proceedings have been initiated in the courts this year.
Speaking in Brussels, the Minister said not every case in the courts would lead to someone losing their home.
He said that often, banks went to court simply so that mortgage holders could be encouraged to hold talks on how their loans could be restructured.
"In December alone, 2,500 mortgages were restructured. What we want people to do is engage with their lenders and see can they work out restucturing for their particular case," he said.
"We don't see repossession as part of the solution."
Director general of the Free Legal Aid Centre Noeline Blackwell said FLAC utterly disagreed with the Minister.
"So when the Minister said it is people who are not cooperating with the banks, the Minister is taking the world of the banks entirely (regarding) who is not cooperating and what loan is not deemed sustainable," she said.
"If the Government is serious about trying to help people to stay in their homes, they should stop lenders right now (from taking these cases)."