She said: "I think it’s a scandal. We need to get to the bottom of how the government could have sold these loans as by selling them the government has reduced the consumer protection and safeguards for the loan."
In March, the FCA admitted not all mortgage prisoners would be helped by the new lending rules it proposed as it was up to lenders to offer remortgage opportunities to customers, which made it a "commercial" decision.
Ms Malhotra said this was a key concern for the group alongside the fact that unregulated lenders might not have to highlight this relaxation of the rules to their customers until the end of 2021.
The plight of mortgage prisoners has been pushed into the public eye and brought to the FCA and government’s attention partly through the work of pressure group UK Mortgage Prisoners.
Last month, the pressure group met with the Treasury select committee and the FCA to lobby for faster and better action for mortgage prisoners.
Ms Malhotra said the actions of the pressure group showed the strength of the feelings involved in the problem felt by mortgage prisoners.
She said: "The support they now give each other is incredible and it’s striking to see how many people have been impacted by mental health and breakdowns because of this. Before the group, they thought they were on their own.
"The good thing is that there is now a dialogue with the FCA and the government. As the APPG, we will keep challenging every part of the system — lenders, the FCA and the government."
An HM Treasury spokesperson said: "We know that being unable to change your mortgage can be a difficult and stressful situation.
"That’s why we’re working closely with the FCA to remove barriers, including changing lending rules that will put any customers that are up to date with their payments in a better position when looking to remortgage.
"When selling mortgage assets we engage fully with active lenders as part of the process and have always required bidders to agree to a full set of customer protections. This is before their bids are considered on price and other factors."
What do you think about the issues raised by this story? Email us on email@example.com to let us know.