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Mortgage regulation system to run until 200

The system for statutory regulation of mortgages, which controversially excludes mortgage advice, looks set to run until at least 2003.

The FSA regulation of

mortgages will not come into effect until autumn next year. After two years, it will be reviewed by the Government under plans announced as part of the Treasury response to the Cruickshank review of banking.

Consumer groups and IFAs have criticised the Government for failing to regulate advice directly and for the delay to implementation of the regulatory system.

But lenders have welcomed the Government&#39s decision, claiming it will help establish the system where lenders police intermediaries.

Consumers&#39 Association senior policy adviser Mick

McAteer says: “The Government&#39s proposal not to regu late mortgage advice is a mistake. It is an ill-judged decision as the whole process should be regulated.

“But because it made the decision in the first place, it now has to give it time to run before it reviews the situation.”

The Mortgage Code Compliance Board is threatening “fairly significant disciplinary proceedings” against a number of its registered firms.

The firms, which have not yet been revealed, have already had warnings over not disclosing fees or information to clients and not refunding fees when appropriate.

MCCB chief executive Luke March says: “We always hope firms put their own houses in order before we have to take action against them. All the firms we are taking proceedings against have received plenty of warnings and clear guidelines about exactly what they need to do to comply. This is a last-ditch attempt.”

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