Mortgages PLC has informed one third of its packaging partners that their agency agreement will be terminated by March 18 unless their performance picks up.
Pete Thomson, Mortgages PLC's head of sales, says in a letter to packagers: “During the past 12 months, the business we have received from you has not been of a level that warrants the maintenance of a packaging agreement.”
Julian Wells, head of marketing at MPLC, insists the company is just “rationalising” its panel. He says: “We are not saying that other packagers aren't worth dealing with, just that we're focusing on packagers we have good relationships with. A lot of firms have packager status that don't deserve it, and a lot of lenders are wising up to that. Packagers are supposed to introduce volume business. Why should lenders pay 2% on that business when a packager only supplies two or three cases every six months?” Meanwhile, Kensington Mortgages has denied industry claims that it too plans to consolidate its panel of around 80 packagers.
Chief executive John Maltby says: “Packagers are a fundamental delivery channel and we have no plans to pull back.”
Instead, Maltby says KMC will continue its existing strategy of vetting packagers – albeit more thoroughly than before.
He says: “An ongoing review depends on making sure it makes sense for those 80 packagers to continue with KMC. We've always had vigorous processes to ensure packagers can provide volume business. With impending regulation we're also looking to make sure that when we add to the packager panel it is someone that has a longterm future.”