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CA&#39s draft rules on mortgages welcomed by CML

The Council of Mortgage Lenders has welcomed the Consumers&#39 Association guidance to lenders on best practice for drafting mortgage terms and conditions.

The two organisations are in agreement on many issues regarding the fairness of mortgage terms but the CA backed down on some issues and amended the draft guidance following talks with the CML.

The CML says it particularly welcomes the CA&#39s acknowledgement that the mortgage code already states that advertising and marketing material should be clear, fair and reasonable as well as, before consumers take out a loan, explaining the financial consequences of repaying a mortgage early.

In its response to the CA&#39s guidance, the CML says the mortgage code also already requires lenders to bring to consumers&#39 attention the implications of changes in personal or financial circumstances.

But the CML says some changes in the guidance did result from the talks.

Spokesman Bernard Clarke says: “As a result of our discussions, the Consumers&#39 Association did modify its stance on certain issues, including redemption penalties.

“It amended the first draft guidance to read that terms were only unfair if they required that the consumer pays redemption charges disproportionately higher than the lender&#39s costs and expenses.”

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