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Government to extend catmarks to mortgages

The Government will extend its controversial catmarking scheme to embrace mortgages this week.

The Treasury is rushing to publish a consultation paper before its mortgage seminar bringing together lenders, consumer groups and the FSA on Monday.

The paper is expected to be less prescriptive than catmarked Isas or stakeholder pensions but will be a voluntary scheme which it hopes will bring improvements across the mortgage market.

The Council of Mortgage Lenders is developing a disclosure regime for mortgages similar to FSA key features documents but is waiting to see the Treasury paper before it publishes plans.

Industry sources expect the Treasury to clamp down on buildings and contents insurance tie-ins, annual interest calculations, redemption penalties, variable rates set entirely at the lenders discretion and high thresholds for lump sum repayments.

The news comes as the FSA consumer panel warned today&#39s mortgage borrowers may lose out from bad deals in any transition period to full FSA regulation.

The Consumers&#39 Association is also preparing to &#34name and shame&#34 lenders responsible for the &#34top twenty mortgage scams&#34.

CML head of external affairs Sue Anderson says: &#34We envisage something like the FSA key features document so people can have information about a mortgage in a single format, as for the catmarked mortgage we have to wait and see.&#34


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