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PACKAGING SUMMIT 2007: Lenders warned over dual pricing

Packagers have accused lenders of mistreatment over the dual pricing of mortgage products depending on whether they are sold direct by brokers or through the distribution channel.

On the first day of the Mortgage Strategy Packaging Summit in Nice, Roger Morris, managing director of em-financial, told delegates that lenders have developed the practice of dual pricing because they misunderstand what packagers do and the value they add to the mortgage chain.

Morris also suggests that the practice might lead to lenders losing volume as a result.

He says: As a distributor I might reach a point where I have to make a choice between a lender that operates dual pricing or not to go on my panel. Its much more likely in my view that I would choose the lender that doesnt operate a policy of dual pricing for my panel.”

Nigel Payne, managing director of The Mortgage Business, says: I dont particularly agree with dual pricing but I can see why some lenders do and that’s because of the different costs associated with different distribution channel.

“But it may also have something to do with how a lender chooses to position themselves in the market.

Morris adds: “Packagers and lenders need to compete on a level playing field. If a lender wants to set up a direct to broker arm then fair enough but dual pricing is not fair and if lenders offer benefits in the products that we cant compete with then that is unfair. The only thing that leaves us to compete on is service.


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