Stop and think what they deliver and it will surprise you. If volumes are an indicator, production alone is significant, adding up to many billions in annual mortgage completions. But the media messages are confusing for packagers. Read one article and they're in business, another and they're out. None of this is helpful.
The word packager is meaningless in today's market. It is a generalisation that undermines the value of intermediaries who can produce business in significant volumes. Essentially packagers are brokers with an underlying distribution.This distribution can be either direct with consumers or with other intermediaries. In other words, packagers open doors to the market.
The benefits from the lender's perspective are many. Packagers deliver volume from one controllable source. This source can be guided via regular contact with panel lenders to use lender criteria most efficiently. Putting the packager in control reduces waste and saves time. It makes no sense to deal with a sprawling distribution when you can have access to the market through a variety of packaging sources.
From the intermediary's viewpoint the benefits are huge. Many supply sophisticated software to source appropriate mortgages. Some have excellent packaging teams and others offer highly competitive exclusive products.
The growth and success of this market is demonstrable in many ways. A majority of lenders supply onsite underwriters to add value to the packager offering. Many packagers see the benefits of branded lending and offer their own product to their distribution.
The point-of-sale intermediary has two choices – deal directly with a lender, or use the services of a packager. Businesses that do not add to customer value (whether consumer or intermediary) do not have a future. Packagers can't be accused of doing anything other than adding value. In a market of increasing choice and complexity, a service provider that supplies information and assistance to customer-facing sales staff makes sense.
So, whatever the future holds, I wish packagers the best of luck. One thing is clear – without them today's mortgage industry landscape would look very different to the detriment of all.
I am confident they will continue to be an essential element of the UK mortgage market.