The Council of Mortgage Lenders is to clamp down on lenders and intermediaries who dodge its fee-disclosure regime.
The CML's code of practice says all fees paid to brokers should be revealed to borrowers. But lenders were uncertain whether this applied to marketing and packaging fees paid to IFA networks, panel managers and master brokers.
The CML issued a circular to all lenders at the start of this month outlining that the total fee, including marketing, packaging and commission, should be disclosed to the borrower.
The move could create anger among IFAs and dir ect salesmen when they find out how much panel managers, life offices and networks are paid by lenders.
According to the circular, the CML wants to "avoid potential criticism of lenders" and "any accusations that the fee disclosure arrangements could be misleading to customers".
The move to clamp down on fee disclosure comes a week after the Government warned it will be monitoring the code of practice very closely over the next year to ensure it protects customers.
Royal & Sun Alliance life and pensions mortgage market manager Mark Evans says: "They have changed the basis of disclosure. We thought that it was the other way. I want to understand why they have done it."
CML head of external affairs Sue Anderson says: "Interpretations about how to treat different types of organisations had been around but this is a reclarification. This means that a customer cannot be left in doubt or apprehension that somehow the lender and intermediary have cooked up a lower fee to disclose."