The Code of Conduct on Mortgage Arrears does not allow the imposition of charges or increased interest rates on people in default.
I proposed this as a member of the Expert Group on Mortgage Arrears, so I agree with in principle. However, it should be reviewed. There seems to be widespread strategic default and there is very little penalty for this.
People with cheap tracker mortgages can extend those mortgages without penalty simply by going into arrears. At the very least, the lenders should be able to charge them the SVR on the arrears portion of the mortgage.
Of course, a lender must be able to charge a borrower with the legal costs of recovering the loan. Do we need to provide for this in the legislation?