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Rebels with a cause

Guy Anker looks at the disagreements which led to the founding of the AMPD

But the establishment of the Alliance of Mortgage Packagers and Distributors has raised the question of whether the sector needs so many organisations representing it.

It also has the Regulatory Association of Mortgage Packagers and the smaller Freehold Group.

AMPD spokesman John Mawdsley admits that the market would be better off being represented by a single voice but says this is an unlikely prospect at present.

“It would be much more efficient to have a single body and it is a sensible idea but who knows how far away that is?” he says.

Hamptons International Mortgages managing director Kevin Duffy says: “If you had all your machinery together, you would be more powerful, but it is unlikely to happen with packagers until someone really makes it worth their while financially.”

One of the stumbling blocks to that Utopia is potential clashes over commercial issues, such as the circumstances that led to the 12 rebel members quitting the PMPA and leaving it with just 10 firms. The founding members of the AMPD say they were opposed to the PMPA having a stake in the organisation’s common lender, Unity Home Loans, which they feared raised conflicts of interest.

That experience has led to the AMPD creating a panel of 12 lenders – a figure which could increase in future – rather than establishing a similar scheme to Unity.

Mortgage Force managing director Rob Clifford believes the creation of a single body is unrealistic at this stage due to problems in getting a suitable number of competitors to agree on common commer- cial themes.

He says: “If anything, there is room for more bodies in the packager market because their purpose is to use their volume and power to agree deals with suppliers, whether that be with lenders or even IT and stationery providers. The point where having multiple bodies would not work is when they are trade bodies rather than commercial alliances.

“If they got to the stage where they were lobbying the regulator or Government, as the Association of Mortgage Intermediaries and the Council of Mortgage Lenders do, then you need to be representative of the market, which means the body needs to represent a significant proportion of the sector.”

The next step for the fledgling AMPD is to appoint a senior management team and secure deals with the 12 lenders it claims have provisionally agreed to form its panel.

It also plans to introduce a range of self-certified, buy-to-let and sub-prime products once it is fully up and running.

Mawdsley says the alliance will seek to help members meet their regulatory requirements as well as providing commercial deals.

He says: “The launch, on the back of a successful 2005 for members, goes to demonstrate the strength of the group. This strength reinforces our ability to build on our core values which will be improved upon by the introduction of a range of new initiatives which are aimed at raising standards within the industry.

“The speed with which the AMPD has been formed and launched is testament to the commitment and enthusiasm shown by its members and the AMPD lender panel.”

The 12 AMPD members are AMF London, Independent Mortgage Processing, LMS Specialist Mortgage Services, Mortgage Bureau (UK), Mortgage Choice UK, Mortgage Match Home Loans, Mortgage Processing Centre, Tudor Mortgage & Finance, The Mortgage Partnership, The Mortgage Trading Co, Trustguard Homeloans and Zebra Homeloans.

But amid the fanfare accompanying the launch, divisions between the PMPA and the AMPD are obvious. A statement from PMPA directors expresses regret over the AMPD’s recent public outbursts, which included an open invitation to more PMPA members to join its ranks, but insists there will be no war of words.

The PMPA says: “We are saddened that the AMPD has felt the need to try and engage in a war of words in the press. We have not, and will not, respond or engage in such a manner. We will make no further comment on the split other than to say, as we always have, that we wish the new group well and trust that they, too, will now let the matter rest.”

The PMPA also says it has no plans to alter its structure despite the loss of the 12 members, which between them brought in 2bn worth of business last year, according to Mawdsley.

The directors say: “The PMPA will concentrate on the retained membership and work closely with them, our lender partners and intermediary introducers who have all stood closely beside us during the past few weeks.”

There is some concern in the market that the loss of a significant number of members will inevitably reduce the PMPA’s power in negotiating contracts.

The Mortgage Business managing director Nigel Payne says: “There is still enough of a market left for Unity to continue.”

TMB director of sales Peter Charge says: “We will continue to trade with the PMPA but we are also interested to see what the AMPD has to offer and the market is big enough for both of them to succeed.

“There is likely to be a bit of a battle between the two but that also depends how things pan out as it is still early days. Either way, there will be some healthy competition.”

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