Eddie Smith, director of operations for the Association of Mortgage Packagers and Distributors, said he believed that while lenders repriced products in the current turbulent economic climate, they would take the opportunity to re-evaluate the worth of distribution and reconsider distribution fees.
Smith said: “I appreciate lenders have to adjust pricing as they have to make some margin, but we need to be in those discussions. I don’t for one minute believe that lenders won’t use distributors, but there will be a reduction in fees.”
He added that as technology developed, lenders might consider that packagers were no longer doing the same amount of work and that is when they would want to make savings. “The next 18 months is critical for packager groups. What we are doing now is not what we’ll be doing in 18 months.”
John Rice, managing director for the Regulatory Alliance of Mortgage Packagers, said: “Lenders value the distribution channel rather than the work carried out. Obviously, everyone is being squeezed and certainly fees are an area lenders will look at. Once we come through the current climate the market will be much more robust.”
