Mortgage packagers and distributors have reacted equivocally to the announcement by Royal Bank of Scotland Intermediary Partners that it will no longer accept mortgage cases from them.
RBSIP says it decided to stop accepting packager cases after reviewing its distribution processes. It says the review led it to “streamline the valuation process” by eliminating packagers. The lender claims that the move means it can offer a more consistent service to mortgage intermediaries.
RBSIP, which has only used a limited number of packagers for some time, says it will still accept business from packagers acting as direct brokers and will pay procuration fees.
John Mawdsley, managing director of The Mortgage Partnership – one the packagers that has been dropped by RBSIP – says the move will make little impact on its packaging and distributing business.
He adds that TMP has never done a great deal of bsines8 with the lender because it made it difficult to do so.
Mawdsley adds: “They seemed to contrive to make it difficult for packagers to do business with them. It was actually a bit of a nightmare to work with them really.”
Mawdsley says RBSIP insisted that all remortgage business went to one of its two brands – Royal Bank of Scotland and Natwest – while purchase business had to go to the other. He claims that TMP did not receive a satisfactory explanation from RBSIP for this, or for the lender’s recent decision to refuse all packager business.
“Their actions showed they really didn’t want to do business with packagers. They clearly don’t understand packagers or packaging and I think that as an organisation RBS lacks direction,” he adds.
While Mawdsley says the impact on his business has been minimal, he adds that had RBSIP decided to refuse packager business two years ago the impact on TMP would have been greater.
Michael Clapper, chief executive of Enterprise Group, adds: “The commercial terms RBSIP was offering were not particularly favourable to packagers. I don’t think it was getting a lot of business from them in the first place and so made the decision to drop the service.
“I have never spoken to a packager that has extolled the virtues of RBSIP and it really should stick to what it knows, which is the direct to intermediary channel.”