John Rice, managing director of RAMP, believed that packagers would need to make tough decisions to ensure their survival in the current climate.
With applications down by 35 per cent in September, Rice urged packagers to make decisions on staffing levels so that they could benefit from the eventual upturn.
He said: “I expect to see redundancies in the order of 20 to 30 per cent in the weeks to come from firms planning far enough ahead to be in a position to both weather this crisis and take advantage of the upturn when it comes. On current projections, packager income could fall by up to 60 per cent by Christmas and those firms that will come through are those who see that prudent action needs to be taken now to ensure survival.”
Rice was also critical of lenders, and said: “Conversion rates have been badly affected by the panicked way in which products have been pulled, impractical deadlines have been set, which in turn have not been helped by the use of inflexible underwriting to ensure brokers and packagers had no chance of meeting those deadlines.”
Rob Clifford, chief executive at Mortgageforce, said: “There is a paradox in the crisis that lenders and brokers are not considering the role of packagers, as they are under threat. Lenders are looking to cut out the packager but don’t want any of our customers to lose out. The irony is that at times like this , packagers come into their own and I hope brokers stick with them.”
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