Packagers played a part in creating the risky lending model

It’s sad to hear that Rob Jupp, director of Savills Lending Solutions, and all staff at the firm have been placed in consultation.
I know Jupp from his estate agency days and he’s a nice chap.

But I think we also need to recognise that packagers have been responsible for the type of lending that has been proved to be high risk.

When packagers specialised in self-cert, adverse and buy-to-let deals – as that was where the big packaging and proc fees were – it was obvious that the business model could not survive a shake-up of lending criteria.

The place in the market for these types of firms was often to secure loans when they should have been refused.

I’m not suggesting that Savills or Jupp were providing these types of mortgages but when packagers email brokers saying that they can secure 80% LTV lending with capital-raising on a self-cert basis for clients with unlimited County Court Judgements and six months’ arrears you have to question who benefits.

Does the client? Or is it just the broker and the packager who will both take a 1% fee from the lender?

So, sad as it is for individuals to be placed in consultation and possibly lose their jobs one should question business practices that were responsible for products being withdrawn, threatening the viability of the packaging business model.

I wish Jupp and his colleagues all the best but I can’t help thinking they must have seen this coming.

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