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&#39Wafer-thin margins may squeeze out mortgage packagers&#39

Mortgage packagers face a fight for survival in the mainstream market as lenders look for ways to cut costs in the low interest rate environment, claim brokers.

They believe lenders will soon be forced to reassess their relationships with packaging firms as a result of wafer-thin margins and FSA mortgage regulations which require providers to monitor the product information given to borrowers.

To comply with the FSA&#39s new rules, brokers say that lenders will have to adopt technology which enables them to control the literature provided to clients. But as such systems are primarily mortgage-sourcing platforms, which allow lenders to give preliminary mortgage agreements within minutes, brokers claim there will be no room in the sales process for third-party firms.

Mortgage Intelligence managing director Sally Laker says: “There is just no margin in the mainstream market at the moment and, with compliance-checking software in the pipeline, I can see packagers being surplus to requirements.”

Mortgageforce managing director Rob Clifford says : “Mainstream packagers have their work cut out to survive. Those that do will be those able to demonstrate to lenders tangible added-value in terms of technology and compliance.”

Pink Home Loans managing director Peter Presland says: “It is a mess but we are not too worried about our role in the market under the new rules.”


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