Packagers, EM Financial and Mortgage Match have joined forces to set up EM Residential Funding, a new branded lender.
The packagers have used their combined distribution offering to negotiate branded lending deals with both GMAC-RFC and Southern Pacific Mortgage Limited (SPML), although both packagers will still continue to operate separately in their own right.
Edward Strange, managing director of EM Residential Funding, claimed that few packagers would be able to emulate this model alone as both packagers were unique.
He said: ‘The difference is all parties are established in their own right and produce high volumes. It is a natural progression for established packagers, and others may join us in the future. We are in talks with two or three at the moment, but we do not want to make the mistake of expanding too quickly and not being able to service it.’
Commenting on the deal, Stuart Aitken, director of credit at SPML, said: ‘The advantages for GMAC-RFC and ourselves are clear. It is simple to deal with from an administrative point of view as we are dealing with one company rather than two, and then there is the combined volume from their distribution. It means we can further outsource our business, which makes us more flexible, and with the closer relationship the quality of business is better.’
If the deals prove successful Strange said EM may look to agree another deal with a specialist lender.
Peter Beaumont, sales and marketing director at Mortgages plc, hinted that it would be interested in dealing with the company in this way too.
He said: ‘EM Financial is an established player in the North East and North West of the country. They have for some time been developing in the South East. The tie-in with Mortgage Match allows it to approach critical mass faster than it could organically. Mortgage Match is also a vibrant, dynamic company that is growing rapidly.
‘This tie-in allows them to fulfil GMAC-RFC’s requirements for a branded relationship. We know both parties well and look forward to discussing various opportunities with them over them coming months.’