Thousands of people stopped paying their mortgages once they knew their houses would not be repossessed.
A Central Bank report has found a direct link between an increase in the number of people going into arrears and a High Court judgment which blocked banks from reclaiming homes.
In 2011 a High Court judge made a ruling to block the repossession of homes. This was due to a legal loophole which was addressed two years later.
A new report from the Central Bank has found that during this time, people stopped paying their mortgages.
According to the Irish Independent, these people could have continued to pay, but went into arrears instead, because they knew they couldn't be evicted.
The new paper has found a direct link between the High Court judgement and an increase in the number of people defaulting.
Ireland has some of the highest mortgage debt in Europe with almost 51,000 residential mortgages more than three months in arrears.