PMPA members plan breakaway group

The majority of the members of the Professional Mortgage Packagers Alliance are planning to leave and set up their own group, the Association of Mortgage Packagers and Distributors.

The split follows allegations that two of the four founding directors used the PMPA to further their own businesses to the detriment of other members.

An industry source tells Mortgage Strategy that All Types of Mortgages and BDS persuaded the other 18 members not to recruit networks as individual companies but through the PMPA as a whole.

It is alleged that AToM and BDS then went back on this and took on networks.

As reported last Wednesday on Mortgage Strategy Online, non-director PMPA members were also disgruntled because of the division of shares in lender Unity Homeloans.

Investec is a 25% shareholder, the directors of Infinity hold a further 25% and the remaining 50% is held by the PMPA.

But within that 50%, 30% is held by the four founding packagers, AToM, BDS, Amity and Complete Mortgages, 2.5% by Jon O’Brien, operations director at PMPA, and just 17.5% between the 22 members including the four founders.

Also, the shares held by PMPA members are non-voting, meaning they have no direct stake in Unity and therefore no real power in its running.

It is now expected that the majority of the 18 members will form a new association with equal equity given to all members.

It is also alleged that Amity might join the insurgents because of its connection with the PMM network, which other PMPA members are part of. Managing director Bob Scott was unavailable for comment.

Ian Nelson, chairman of the PMPA, denies it is on the cusp of a break-up. In a statement issued by all four founding directors, he says: “The PMPA is not dissolving and it continues to have a strong core membership. Some members have recently expressed their intention to resign from the organisation, but by no means all the non-founder members.”

Nelson also says a new PMPA structure is being prepared which will be offered to some members. But critics claim it is panicking about losing its core membership over structural disputes and that changing things now will be too little, too late.