Two thousand Permanent TSB customers are selling their homes as part of the bank's so-called assisted voluntary sale process.
It has also been revealed that 15% of Permanent TSB's owner-occupier mortgages are in arrears.
The bank's management team appeared before the Joint Committee on Finance, Public Expenditure and Reform.
They said the bank had moved an increasing number of defaulting mortgage customers off short-term remedies and onto longer-term plans in recent weeks.
Since June, the number of Permanent TSB customers on short-term mortgage repayment plans has fallen by 10%.
At the same time, the number on longer-term restructuring arrangements has grown by 4,000.
The bank said it now has 10,000 arrears customers in short-term solutions and 9,000 in long-term solutions.
While the bank has included write-down as part of solutions, it is taking legal action against 1,600 borrowers.
Sinn Féin's Pearse Doherty said that, across the three banks that the Government has shares in, over 10,000 letters have been sent to customers threatening repossession.
3,500 on split mortgages
Among the long-term arrangements at Permanent TSB are 3,500 split mortgages.
The committee heard that customers will be asked to pay the warehoused portion of the mortgage at the end of the term.
This would mean the customer would be liable for the outstanding capital at the end of the life of the mortgage - ie 25 years.
The bank's chief executive Jeremy Masding said he did not want to see restructured mortgages being paid by people after they reached 65 years of age.
He said trading down by customers at the expiry of the mortgage term was a "legitimate request" for the bank to make.
Permanent TSB was praised at the committee for giving a detailed breakdown of the "treatments" it has offered to mortgage customers in default.
In the first half of this year, the bank provided a range of restructuring plans to more than 6,650 customers in arrears out of a total of 25,000 mortgage holders at the bank who were more than 90 days in arrears.
The bank's head of asset management, Shane O'Sullivan, said the bank had exceeded a target set down by the Central Bank to move 20% of defaulting mortgage customers onto a sustainable payment regime.
Around 26% were offered such treatments, he said. However, this figure has yet to be approved by the Central Bank.
The building society said it will provide any assistance it can to the former residents of Priory Hall in Dublin, including possible debt write-down.
Mr Masding described as "unique" the situation experienced by former Priory Hall residents, who were forced to leave their homes after Dublin City Council said they were defective and uninhabitable.
Minister warns on complete solution
Minister of State Brian Hayes said he is not happy that banks sending legal letters to customers with mortgages in arrears could be described as a complete solution.
During the Oireachtas committee hearings, AIB said it met its Central Bank targets by including legal letters to some of its customers, while Ulster Bank also said the sending of such letters counted as a sustainable solution.
Mr Hayes said the Central Bank would report in due course whether the financial institutions had met the 20% target on dealing with mortgage arrears.