The lender/packager relationship has historically been to vary distribution. But continued attempts by many to aim for direct-to-intermediary business has prompted concern. This has been further fuelled by CHL Mortgages’ move to offer enhanced procuration fees for direct business from intermediaries.
Eddie Smith, operations director at the Association of Mortgage Packagers and Distributors (AMPD), said the issue was always on the agenda.
He explained: “From our point of view, we work in partnership with lenders and what we do on their behalf saves them money. We want to keep one step ahead of lenders and provide the volumes, as they can’t ignore how big a distribution we provide.
“Lenders want to go direct, but they don’t want to annoy their distributors. The key is for lenders to understand we give them value and business volumes.”
John Rice, managing director for the Regulatory Alliance of Mortgage Packagers (RAMP), added: “As lenders grow, most want variation in their distribution. It’s a natural evolution and packagers can’t fight it. We have to add enough value for the non-mainstream lenders, as our job is to make sure brokers get the best deal by going through a packager.”
But Nigel Payne, managing director for The Mortgage Business (TMB), said lenders who gave enhanced procuration fees were missing the point. “For a straightforward case, there is no incentive for a broker to go through a packager. But if they feel the best advice can be sourced via a packager, then that’s what they’ll do. Procuration fees are a non-issue.”
