Packagers are dead, long live specialist distributors
Hard as it might be to believe for those who danced on the graves of the old style packagers, much of the innovation in terms of better products, better criteria and sensible underwriting, has come about because the collective energy and enterprise of smaller, innovative lenders has been showcased and championed by the new breed of specialist distributor.
In the years since 2008, the mortgage distribution model has undergone significant change. From the wreckage has sprung a leaner distributor base, which has become a magnet for smaller, more entrepreneurial lenders. The simple fact is that specialist distributors help both lender and intermediary directly.
For lenders, using a distributor not only provides cost effective access to the intermediary market, but also brings benefits in acting as an effective filter for enquiries, which means that cases submitted through this channel are more likely to go on to completion, saving time and money.
For brokers, tired of having their enquiries turned down by larger lenders wedded to credit scoring and computerised decisioning, distributors now represent a significant resource for their clients as their lenders are more prepared to look at deals on their individual merits.
Intermediaries are reassessing the value of ‘broking’ their business in the true sense of the word, rather than relying on the results from their sourcing system of choice.
Distributors, with the range of lenders they now offer, have become the right partner for enquiries of all kinds and particularly those that do not tick the ‘perfect’ box of the high street lender.
With the help of specialist distributors, networks are also better able to offer new lenders to their ARs through a properly controlled environment. More networks are finding it makes good business and compliance sense to deal with one specialist distributor, who can provide management information and an audit path from enquiry to completion rather than deal with multiple small lenders.
Rob Jupp is CEO at Brightstar Financial