Quotas for packagers good idea, says TMB

Nigel Payne, managing director of The Mortgage Business says lenders that pull products at the last minute should consider offering packagers quotas.

Payne says that he sympathises with packagers, but in many cases it is not possible to give a large amount of notice when pulling products.

He says: “I think the idea of introducing quotas is a very good one and it is a big issue in the packager market.

“Lenders withdrawing products at the last minute has caused problems for packagers. But when a lender pulls a product from the market it’s a signal that it does not want anymore lending on that particular product.”

Payne says that TMB gives notice when withdrawing products so hasn’t found itself in this position. However, should the need occur it will look at quotas as an option.

But Payne says that packagers don’t often help themselves. He says that when lenders give packagers notice that they’re about to pull products this can lead to a massive spike in the number of applications that they receive. As a result, it’s often a better tactic to give a short notice period to avoid such a spike.

TMB is not the only lender that is looking at the proposition.

Clive Wilson, sales director, at Beacon Homeloans says that feedback it has received from packagers has led it down a similar route.

He says: “We have asked packagers whether they would prefer to have a booking fee for products or we could introduce a quota for them. Because of our size it is easier for us to implement a quota with our packagers because we are smaller. We have not introduced it yet, but it is something that we may do, and our feedback shows that it is what packagers want.”

Wilson also says it could mean that it agrees a set number of completions that the broker, such as £2m, which would lead to less spikes when products are pulled.