Packagers and clubs must &#39redefine&#39 themselves

Sub-prime packager First Mortgage Options says traditional packagers and mortgage clubs are “doomed” and must redefine themselves within a regulated industry.

Alan Hill, managing director of FMO, which also classes itself as a “value-added network”, says: “A year ago we decided that packagers were effectively dead in the water. We couldn&#39t see what they could do apart from offer a correspondent lending or outsourcing facility. We can&#39t see what role mortgage clubs will go on to play because the FSA will want accountability. I can&#39t see how packagers or clubs can fulfil that criterion.”

Hill also feels that there are no networks with a real focus on mortgage brokers. He says: “We provide a range of services, including compliance, training, support on non-conforming loans, and access to our direct panel with an unrestricted range of products. The IT aspect is the real source of adding value. We believe that in order to be the middleman now, you have to produce an economy of scale for the guy at the point-of-sale who has the customer in front of him, which he could never achieve by himself, and also to make it very easy for him to use.”

Hill believes many packagers will not survive after January because a large proportion of their introducers will not be qualified. To solve this problem, FMO runs its own CeMAP training course.

Hill says: “Having built up the business to this level we don&#39t want to take a step back.”

FMO had a soft launch of its &#39network&#39 on September 31, based on feedback from the CeMAP course, which will launch officially in January. Hill adds: “It&#39s time for a new name for our type of innovative service provider within an industry experiencing phenomenal changes.”