The sale of mortgages in the UK is a £500 billion business. Huge. There are tens of thousands of intermediaries and advisers offering thousands of mortgages from hundreds of lenders. And there is still no legislation in place to control many of the practices of those involved in the industry.

For years, some lenders have got away with practices that could at best be described as dubious and at worst, verging on the criminal. Catches, clauses and caveats have been hidden away in the small print of policy documents, often with hard-hitting financial repercussions for the unsuspecting customer.

Although the sale of mortgage advice is regulated by the FSA, there are no plans to regulate the sale of mortgages themselves, so the Council of Mortgage Lenders (CML) introduced the Mortgage Code in an effort at self-regulation. It is a set of principles and practices that lenders voluntarily subscribe to, which should help protect the interests of the borrower from unscrupulous practices. The code sets out how a lender or intermediary should act when arranging your mortgage, as well as how you should be dealt with once your mortgage is in place. It also tells you how to complain in the event of a lender not keeping to the code and who to complain to. If a lender or intermediary that subscribes to the code fails to meet its standards and you suffer as a result, you may have the right to compensation under an independent complaints scheme.

According to the code, there are three different levels of service that your lender or intermediary may provide to help you choose a suitable mortgage:

1. Advice. This involves a full consultation, information about as full a range of products as is appropriate and a recommendation of the most suitable mortgage for you.
2. Information on a range of products. You are given all the information, but it is down to you to decide which product is most suitable. You should be informed whether this range of products is from a number of selected lenders, or from the market as a whole.
3. Information on a single product. This level is offered where only one mortgage is available or if you have already decided on your chosen product.

For all levels of service, you should be given information on the following areas of the your chosen mortgage:

• The repayment method and period.
• Details of any early redemption penalties.
• The nature and details of the interest rate - tracker, 3 year discounted etc.
• What happens to the rate after any introductory period.
• Details of any compulsory products which must be taken with the mortgage.
• The setup costs of the mortgage - valuation fees, arrangement fees and so on.
• Whether the mortgage product is portable if you move house.
• When your personal details will be assessed by credit reference agencies.
• Whether you need to pay a Mortgage Indemnity Guarantee.
• If you are using an intermediary, they must also disclose the fee or commission level that they receive from the lender.
• Confirmation in writing of the level of service provided and the reasons for any mortgage recommendation

• Act in a fair and reasonable way with you at all times.
• Ensure that the terms and conditions of all products and services keep to the conditions of the code.
• Provide you with information on products and services in plain language and offer help if there is anything you do not understand.
• Do their best to help you choose the mortgage most suited to your needs, unless you have already made your decision.
• Try to ensure that you to understand the financial implications of mortgages generally and your chosen mortgage in particular.
• Help you understand the workings of your mortgage account.
• Ensure that all staff work in a way that reflects the commitments set out in the code
• Correct errors and handle complaints efficiently.
• Consider cases of financial difficulty and missed payments sympathetically and positively.
• Make sure that all products and services meet appropriate laws and regulations.