Under the proposals, the scope of the Financial Services Authority (FSA) would be extended to include buy-to-let and second-charge mortgages.
And borrowers would be protected when lenders sell on mortgage books to third parties.
Sarah McCarthy-Fry, Exchequer Secretary said, following the financial crisis, the Treasury “was determined to reform the system for the future, to offer both stronger protection for consumers and greater stability in the housing market”.
But the plans may never see the light of day in their current form.
The Conservatives have said they would abolish the FSA if they win the next general election.