Packagers bought by lenders are putting their businesses at risk and could face a quick death with their existing lending panel, a leading industry figure has warned.Last week, Mortgage Strategy reported rumours that Morgan Stanley is looking to buy Advantage Home Loans. But one leading industry source is warning that although the vast majority of brokers still prefer to deal with lenders via packagers, by setting up their own lending arms with cross-ownership or becoming owned by lenders, packagers are putting themselves at risk. The source tells MS: “Packagers face a choice. They’ve seen lenders respond to the demand that exists among brokers to deal direct. Packagers are putting their lenders in the position of opting for a quick death as far as the relationship is concerned, or a slow death. Lenders that opt for the former will effectively be pulling funding away from the packagers.” The source says that once a packager is purchased by a lender, or forms its own lender, it is inevitable that business will be taken away from the previous panel and put into the new venture. The source adds: “There is some advantage to panel lenders recognising this immediately, pulling funding away from the packagers and advising brokers they can still deal with them but via other packagers.” Slow death would involve a declining amount of business over a period of years, the source says, but if the quick option was taken the packagers would be restricting the amount of funding they have access to. The source concludes: “If this happens during a price war they will perversely be threatening their own existence as, if they can’t offer a full range of competitive products to brokers, the they can’t continue as a packager.”
The greatest selling barriers in any emotive sales area are myths and misunderstandings on the part of the consumer. The equity release market is typical of this.
Rooftop Mortgages has launched a suite of stepped light products in response to demand from its packager partners. The suite includes four products. The stepped light plus 90 with one mortgage arrears allowed in the last 12 months with none in the last three months or maximum four CCJs allowed totalling no more than 1,000 […]
Miami-based financial firm Bayview Financial is planning to set up an office in London. The mortgage finance and real estate investment company will be revealing plans for its relocation as soon as it appoints a head of office for its new London headquarters. The firm specialises in meeting the needs of mortgage companies, loan and […]
GMAC-RFC is planning to add to its marketing team and invest more in technology after its POSD system recently topped 1,000 online decisions per day. Just over one year after regulation, GMAC-RFC is receiving record levels of online decisions on its POSD system. It has also seen record numbers of brokers visiting its website and […]
By Denise Wond, Marketing Relationship Manager, Royal London We’ve heard a great deal about Generation Rent in recent years but what does it actually mean for consumers and advisers and has the face of the typical renter changed? The picture is certainly more diverse than it used to be Homeownership has fallen to 64 per […]
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