Thousands of people stopped paying their mortgages once they knew their houses wouldn't 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 based on 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.
The Irish Independent reports that some of these people could have continued to pay, but chose to go into arrears instead, because they knew they couldn't be evicted.
The Central Bank report 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.