In the latest episode of the long-running soap opera that is the relationship between lenders and brokers, Westpac has decided it wants to call it quits.The group has adopted a strategy of shifting loan origination away from brokers to proprietary channels.Westpac chief executive Gail Kelly said this change in distribution gave the bank a better margin on its mortgages and provided greater opportunities to cross-sell to the customer. The group's sales through brokers grew by only one per cent in the March half.  Third-party mortgage origination in the bank's Australian retail and business banking division fell from 41 per cent of loans written in the March half last year to 29 per cent in the September half and 31 per cent in the latest half.St George's third-party origination fell from 44 to 34 per cent over the past year.Westpac and St George have relied heavily on broker distribution in the past. According to the JP Morgan and the Fujitsu Australian Mortgage Industry Report, the group's mortgage sales through brokers were second only to ANZ's in recent years. The problem for lenders is that high-volume brokers demand the right to offer deeper package discounts, which reduces the lender's margin. Some brokers also churn their customers, which reduces the profitability of the loan.But the most important issue is that the broker relationship gets in the way of the lender selling insurance and investment products to the borrower.Cross-sell is key metric at Westpac, which measures customers with four products or more (28.3 per cent of retail and business bank customers); general insurance sales to mortgage customers (76 per cent) and wealth interviews arranged through the bank 15 per cent).These measures are being used to gauge the effectiveness of Westpac's investment in improved branch service, dubbed Westpac Local. The message to brokers is don't stand between a home loan customer and a Westpac loans' officer.One short-term consequence of this strategy is that St George has lost sales in non-core geographies (areas where it does not have branches). The group's mortgage sales growth has dropped below system as a result. The risk Westpac faces is that this could be more than a short-term issue.