Mr Healey made the comments in an interview with Victoria Derbyshire
The housing minister, John Healey, has told the BBC that, for some people, having their home repossessed "can be the best option".
Speaking on Radio 5 live, he said some households would struggle to keep up with mortgage repayments even if the terms were re-negotiated.
The Conservatives called for Mr Healey to apologise to families who had lost their homes.
Earlier, figures showed repossessions in the UK had reached a 14-year high.
The Council of Mortgage Lenders (CML) said 46,000 homes were repossessed in 2009, the highest number since 1995.
Mr Healey, MP for Wentworth in South Yorkshire, was speaking to Victoria Derbyshire after the CML figures were released.
"For some people it can be the best option for them to allow their home to be repossessed... even in cases [where lenders look at repossessions as a last resort] some families may not be able to keep up with mortgage repayments even if they're re-negotiated and rescheduled," he said.
"There is no accounting for every circumstance," he went on.
"Repossession is a permanent feature of our system in good times and in bad. In some circumstances it may be the only option available to them."
The comments caused many listeners to contact the programme.
"Having your property taken by the lender is the worst thing you could possibly do," said one.
"I lost my house in September. It was not the best thing to happen to me by a long shot," said another.
But his views also won support. One listener sent a text message saying: "Victoria, it WAS the best option for us to lose our home. We had spent far too much renovating it and needed someone to say 'Stop'."
Shadow housing minister Grant Shapps said: "Having previously admitted that he thought it was good for home ownership to be falling, it is unbelievable that John Healey has now claimed that repossession can be the best option.
"This proves once again that Labour ministers have completely lost touch with reality." Liberal Democrat housing spokesperson Sarah Teather said Mr Healey "should just shut up".
"Labour has no idea what life is like for victims of the recession. John Healey needs to get out more before he starts dismissing the misery of homelessness," she said.
By Ian Pollock, personal finance reporter
As it has turned out, things are not nearly as bad as they were in the housing slump of the early 1990s.
Thanks to a combination of ultra-low repayment costs, tougher court rules on repossessions, and a variety of government schemes, fewer people than anticipated are either in arrears with their mortgages or have been evicted.
Last year's 46,000 repossessions were just 61% of the total recorded in the peak year of 1991, when lenders seized 75,500 homes.
And in the past few months the position has started to improve. The CML's statistics show short-term arrears and home seizures eased off as 2009 wore on.
But lenders are worried it might not last. About 75,000 borrowers are stuck with stubbornly high arrears.
Any rise in interest rates could well be too much for both them and their lenders, prompting a fresh bout of repossessions.
Campbell Robb, the chief executive of the housing charity Shelter, said: "Any struggling homeowner must seek advice early from organisations like to Shelter to ensure they have all the facts and can make an informed decision about what action is best for them.
"Tragically, however, there are exceptional instances, often as a result of irresponsible lending in the first place, where repossession is the only viable option to avoid pushing people into higher levels of debt."
Earlier, the CML said both the number of repossessions and the number of mortgages ending the year with arrears equivalent to at least 2.5% of the outstanding balance had fallen below their forecasts.
CML director general Michael Coogan said: "The fact that mortgage arrears and possessions did not rise as much as we feared in 2009 is testament to the effect of low interest rates and a great deal of concerted effort by lenders, government and the advice sector to help borrowers to address financial difficulties when they occur."
As a result, the CML said its current forecast for 2010 of 205,000 arrears cases and 53,000 properties taken into possession could be "a little pessimistic".
However, Mr Coogan added: "We are not out of the woods yet - 2010 will still be a challenging year for many borrowers, and some households will inevitably find their finances being squeezed if and when interest rates do eventually rise."
Are you worried about repossession? Have you had your house repossessed? If you would like to talk to the BBC about these issues please complete the form below.
In most cases a selection of your comments will be published, displaying your name and location unless you state otherwise in the box below.
The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide.