Sinn Féin finance spokesman Pearse Doherty has claimed the Government is exaggerating the number of strategic mortgage defaulters.

Mr Doherty published his submission to the Central Bank on the Code of Conduct on Mortgage Arrears this morning. He said banks should not be allowed to call debtors more than three times a month.

“To allow an extension of the number of calls that can be placed to the 180,000 people in mortgage distress amounts to harassment in my view,” he said.

Mr Doherty also said banks should not be allowed to take people off tracker mortgage rates.

“I think those who won’t pay, what’s called strategic defaulters, is being exaggerated by Government and those who want to penalise people who simply cannot pay.”

He said the vast majority of people who are in mortgage distress had lost their jobs or suffered a drop in income. He said people were encouraged to take out large mortgages by the Government, regulators, the banks and in some cases the media, “which were littered with property supplements in their papers everyday”.

The Free Legal Advice Centre (Flac) has said any code of conduct for banks on mortgage arrears negotiations should be set on a firm legal footing.

And those dealing with banks must be afforded legal and financial advice as well as recognition of a need for basic living expenses.

These are among 14 suggestions submitted to the Central Bank on the Code of Conduct on Mortgage Arrears by the organisation. The deadline for submissions is today.

Flag general director Noeline Blackwell said the conduct of financial institutions, as based on the guidelines, should be legally enforceable in cases that end up in court, in effect binding them to the steps set out by the Central Bank.

The guidelines would “to a great extent” guide people in their negotiations with lenders, and it was important the lenders were obliged to follow them, she said. If put on a legal footing it would mean that when a bank decided to go to court “you can say [they] can’t do that because [they] haven’t complied with the statutory instrument”.

The submission also stresses the importance for access to free advice; many of the current bodies like the Money Advice and Budgeting Service (Mabs) are already unable to process existing demand.

“Where are borrowers in arrears to obtain the ongoing financial, debt and legal advice from the State that they require to negotiate on some kind of level playing field with their creditors and to make sustainable and workable decisions for them and their dependants?” the submission asks.

Ms Blackwell, speaking ahead of the body’s submission launch today, said there must be a reasonable regard for living expenses on the part of those in financial dire straits.

“It is Flac’s experience that many households in the current crisis have felt so pressurised by their creditors, particularly mortgage lenders, they are paying an undue percentage of their household income towards their credit commitments,” the submission says.

“In many instances, this has left the household short of money for essential food, heat, light and other services, and this has subjected many to unacceptable levels of deprivation.”