The Free Legal Aid Centre has hit back at claims by the Minister for Finance that banks are only taking repossession cases against homeowners, so that they can talk to the borrower.

Michael Noonan was responding to news that over 7,000 repossession proceedings have been initiated in the courts this year.

Speaking in Brussels, he said banks often went to court so that mortgage holders could be encouraged to hold talks on how their loans could be restructured.

However Director General of FLAC, Noeline Blackwell, said they utterly disagree with the Minister:

Mr Noonan says banks are taking mortgage customers to court just to get them to work out a repayment schedule.

Mr Noonan says the number of cases going to court does not reflect the number of homes actually being repossessed.

Earlier it emerged that banks have begun repossession proceedings for more than 7,000 homes so far this year.

The Irish Mortgage Holders Organisation says the number of repossessions could reach 25,000 within the next two years.

In a statement, People Before Profit TD Richard Boyd-Barrett said: "The cost of these repossessions will not just be to the evicted families but will cost the state the hundreds of millions because the state is still obliged to house these families, adding further to the already vast sums forked out to private landlords in rent allowance."

In Brussels this afternoon, Mr Noonan said not every case in the courts would lead to someone losing their home.

And he claimed that banks are only taking repossession cases against homeowners, so that they can talk to the borrower.

Meanwhile the Public Expenditure Minister Brendan Howlin says the conduct of some banks in personal insolvency cases is "not good enough".

Mr Howlin says banks should engage with their customers, instead of pushing them towards bankruptcy: