Eddie Smith, managing director of the Professional Mortgage Packagers Alliance, said that in the current economic climate, lenders were looking to packagers for a secure distribution channel and to make sure it was cost-effective.
Smith said that lenders were in the driving seat when it came to business negotiations and warned that, with lenders looking to cut costs as volumes reduce, this was being reflected in lower procuration and marketing fees.
Smith explained: “Most of the lenders that are in the market to play are speaking to us, but they are speaking to us on the basis of lower procuration fees, lower marketing fees – all these fees are going down.
"Lenders are going to make sure that they get business on their terms. In the past, there have been some amazing fees because the margins were there, but that appetite has gone.
"It’s all about reducing fees, reducing volumes. It’s a question of keeping relationships; we want to keep them on board, but the income will be less.”
Iain Smith, sales director for Accord Mortgages, said: “There has been some rebalancing going on; lenders aren’t fighting over volumes. What they are doing is looking at the quality of business.
"Quality is the first thing we think about and if distributors can’t deliver on that, then from our point of view, it’s a no. But that’s a healthy thing, as it means that distributors take an interest in the quality side of business and have a worthwhile commodity to go to lenders with.”
