As brokers start to look for ways to save money in these turbulent times, some have decided that they will “cut out the middle man” and by this they mean the packager.
I’m all for cutting out the middle man when it comes to things such as booking my holiday, but I think it strange to hear a broker refer to the packager as the middle man, when in fact that is exactly what they are to a consumer.
Within the evolutionary process of the mortgage market, packagers are offering the same unique selling point to brokers as brokers are doing to consumers. Packagers are able to offer access to lenders, better products and a quicker service. Brokers may also be able to offer all these services to a broker, but in the current circumstances brokers should be thinking about turning to packagers, not turning away. It is true that packagers have had problems with lenders withdrawing products, but this is not anymore than a broker might also experience with a lender.
As lenders look to cut back on business and control the number of applications they receive, they are less likely to accept a mortgage application from a small brokerage and get it processed on time, whereas if you go through a packager then the lender is more likely to take notice of your application and you will have the weight of the packager behind you.
It must be frustrating to receive poor service from a packager when you have got that piece of business in yourself and you are worried about loosing it, but my guess is that a broker will still receive better service from a packager than they would a lender.
A broker may complain that they can make more money and control the case themselves, but surely isn’t this also what a consumer may turn around and say to a broker. I would like to challenge those brokers that feel life would be better it they went it alone, and see how far they get in the next three months, and whether they will decide to come knocking back on the door of packagers, my guess is they will.