The Government has announced additional protection for homeowners whose mortgages are sold to an unregulated firm.
The reform, announced last week, is part of a package of measures to improve consumer protection in the loan market.
The Government says it has evidence that some borrowers may be treated unfairly because their mortgage has been sold on to an unregulated firm as part of a mortgage book sale.
As a result, the Government wants the firm that deals with borrowers to be regulated by the FSA. This could mean the buyer of the mortgage book itself or a third-party administrator appointed by the firm buying the loan book.
The Government has also transferred regulation of new and existing second-charge mortgages from the Office of Fair Trading to the FSA.
Under the measures, regulation of the sale and rentback market will be extended across all providers. The sale and rentback market was subject to an interim system of FSA regulation from July 2009, which was replaced by a full regime in June 2010.
The Government says feedback from the FSA suggests that many sale and rentback transactions are still taking place outside regulation.