Over 200 mortgage broker firms have either withdrawn from the business or have been refused authorisation to trade, said the Financial Services Authority on Monday, the first full day of trading since M-day (31st October)

From this week it became illegal for anyone to sell a mortgage without being licensed by the FSA.

The FSA said 314 late applications were still being processed but that out of 7,676 firms who applied 210 had either withdrawn from the process or had received a final notice of refusal.

Anyone who takes out a mortgage from this week will have the protection of the new regulatory regime, as mortgage lenders and intermediaries come under the auspices of the Financial Services Authority.

Laurence Baxter, Senior Policy Adviser, Which? said, "This is definitely a win for consumers. People looking for a mortgage should be able to count on the FSA not only to regulate the market but also to provide recourse if things go wrong."

Baxter commented that after delivering the right tools, the FSA was now "on notice to use them".

Homebuyers will notice a difference when they come to choose a mortgage, as there is now more paperwork to complete, with more questions about a borrower’s financial status and needs.

A new key facts illustration (KFI) document setting out the important terms and conditions of any mortgage a borrower may be considering must be given, and it must be set out in a standardised, comparable, easy-to-understand format.

Advisers and intermediaries must now disclose information about the commissions they are getting, and whether they deal with the whole market or just one lender.

There are also new strict rules on advertising, to ensure key information is given in a straightforward manner and not hidden in the fine print.

Mortgage advisers now have to meet certain training and competency requirements.

John Tiner, chief executive of the FSA said: "The FSA has worked closely and co-operatively with the industry to ensure that firms go into the new era in a strong position."

"Our focus now turns to the future supervision of the mortgage industry. An early priority for us will be to enforce the perimeter of the new regime and crack down on any firms that may consider continuing with unauthorised and illegal mortgage business."