Rachel Bancroft, managing director, KGB Packaging says that for too long packagers have worked in the background of lenders, brokers and the mortgage broker, and have suffered being labelled “just the middle man”.
Speaking in response to this week’s editor’s blog on Mortgagedistributor.co.uk, Bancroft says:”For too long, packagers have worked in the background to the benefit of both lenders, brokers and ultimately the mortgage borrower, and have suffered being labelled “just the middle man”, usually in cheerful silence, being more concerned with getting on and doing a good job. Now, brokers need to understand just how much value packagers can deliver – especially when there is a decreasing variety of mortgages on offer and products are being withdrawn at very short notice.
“The middle man has always been a soft target for the businesses either side, and this may be justified criticism when the middle man simply shifts products from the supplier to the local retailer without adding value to the supply chain while at the same time taking a slice of the profits. However, this model is not the same as the mortgage lender-packager-broker-customer supply chain.”
Bancroft says that it is the local broker who is expert at marketing mortgages that meet the needs of customers in their area, and brokers that operate at a national level are also primarily business-generating machines.
She adds: “Time spent in checking paperwork, chasing up queries, and reporting back to the customer is premium time that could be better spent in generating more business. This is especially true in today’s climate, where so many products are being withdrawn at short notice, or lenders’ criteria being tightened, that may cause the case to fail – which results in the broker having to start from scratch.”
She continues: “On the other hand, packagers have the experienced staff, expertise, lender contacts, and follow up systems to enable them to submit cases that are ready for underwriting at the point when the lenders receive them, and to quickly re-route the case another lender/product should the initial application fail. Above all, the best packagers have the mind set and will power to persevere through to a positive result for the customer if this is at all possible.
“If you don’t believe me, ask any lender about what percentage of cases get offered when they come via packagers in comparison to those that come in direct from brokers. This is not to say that brokers are lazy or insufficiently qualified to submit cases correctly – they simply don’t have the volume turnover that packagers handle and this means they can’t gain the experience or keep their knowledge of products and criteria as up to date as packagers can.
“We are living through some testing times, but I believe that the packager sector will prove its worth to the industry and emerge stronger and fitter than ever to keep providing its vital range of services to lenders and brokers in future.”