EUROPESERVICING 2008

EUROPESERVICING 2006: PROGRAMME

DAY 2 (JUNE 1):'TOMORROW NEVER DIES'
Mortgage processing, administration, and servicing for residential mortgage loans and RMBS

HOSTED BY TONI MOSS, CEO, EUROCATALYST
and MATT GILMOUR, CEO, INFINITY MORTGAGES

[CLICK HERE FOR DAY 1 PROGRAMME]

07:45	REGISTRATION, COFFEE AND REFRESHMENTS

08:30	INTRODUCTION AND OPENING COMMENTS
	'CONFESSIONS OF A DANGEROUS MIND'
	Optimising servicing considerations throughout the capital structure from an RMBS investor's perspective
STARRING	DOMINIC SWAN, Head of SIVs, HSBC
	This introductory presentation puts the day into context by looking at the investor's position in the capital structure and how it affects their servicing considerations, and what RMBS investors look for the most and what they fear the worst from servicers on transactions.

9:00	'LOST IN TRANSLATION'
SESSION 1	The economics of outsourcing and ethics of offshoring in European mortgage markets
PANEL	JEAN-LOUIS BRAVARD, Managing Director, Global Financial Services, EDS STEVE HAGGERTY, Group Commercial Director, Skipton Building Society LARRY BANDA, Head of Mortgages, Nationwide Building Society NICK LAIRD, Founder and CEO, Global Realty Outsourcing
	In European mortgage lending, outsourcing continues to grow across specific, "non-core" activities. However, despite the use of third parties as a means to reduce costs, increase flexibility, and streamline operations, most European institutions remain reluctant to outsource their entire administration process, and relatively few third-party providers have successfully picked up substantial numbers of clients in what would appear to be fertile markets such as the UK. Are current levels of service, price, and capabilities strong enough to validate the economics promised by third-party administration? Or are other factors, such as risk considerations and the ownership structure of existing third-party providers, presenting a competitive barrier to outsourcing considerations in home markets? Many of the same institutions which are reluctant to outsource at home actively arbitrage high domestic labour costs against lower costs elsewhere, taking advantage of the comparative benefits of offshoring. (At a recent U.S. servicing conference it was estimated that offshoring by U.S. seller/servicers could reach as high as 80% in the near future. ) In the labour-friendly markets of Europe, lenders must weigh the value of outsourcing and offshoring against the social turmoil and political strife raised by the inevitable loss of jobs (in addition to operational, reputational, legal and country risks). Henry Ford famously said that he paid his workers well because he wanted them to buy his cars. Coming from the founder of the first company to apply assembly line techniques to the mass production of affordable automobiles, the deception of his statement took decades to uncover. On the other hand, if we apply that logic to European mortgage industry growth we can't help but ask, "Are workers being paid enough to be able to afford a mortgage? The title of this session, "the economics of outsourcing and ethics of offshoring" outlines both the dilemma and the opportunities facing European mortgage market developments. Our panel evenly balances the range and complexity of perspectives, persuasion and possibilities to balance economics and ethics in an industry that has been slow to react to globalization
RECOMMENDED READING	“Smarter Outsourcing, an Executive Guide to understanding, planning and exploiting successful outsourcing relationships,” by Jean-Louis Bravard and Robert Morgan, published by FT Prentice Hall

10:15	'BRAZIL'
SESSION 2	Bringing transparency and improved reporting to the increasingly complex world of RMBS transactions
PANEL	RICK WATSON, Managing Director, European Securitisation Forum RON ROARK, Chairman, Crown Mortgage Management ROBBIE SARGENT, Associate Director, FitchRatings IAN STEWART, Head of Securitisation and Structured Analysis, HBOS Treasury Services
	A rise in the number of accounting errors in the European RMBS market, as noted in a recent special report by FitchRatings, has placed the spotlight on back-office problems involving documentation, the need for standarisation, the growing complexity of deals, and the overall lack of transparency. The increase in errors has been significant enough to warrant reporting in the daily press. This session looks at the complexities of relationships between originators, servicers, and trustees, and highlights issues regarding the collection and distribution of information across the back office. We also focus on efforts by the European Securitisation Forum to introduce a set of standardised reporting fields and definitions for the RMBS market (similar to the efforts in the CMBS market by the CMSA) to harmonise the information available in RMBS transactions and thereby promote transparency in the secondary market. Moreover, should specific back-office functions currently held in-house by the majority of issuers be unbundled to an experienced third party?
RECOMMENDED READING	"Calculation Errors in European Structured Finance," FitchRatings RMBS/Europe Special Report. 18 April 2006

11:15	REFRESHMENT BREAK

11:30	'AROUND THE WORLD IN 80 DAYS (MINUTES)'
SESSION 3	Cross-border lending and new market entry - an overview of options for third-party administration in key European RMBS markets (and the lack thereof)
	This session provides an overview of "best practices" for residential servicing and an inventory of third-party options to reduce the cost of new market and cross-border entry across Europe. Considering the crucial importance of third-party administration to cross-border lending, this session looks at how cultural, commercial, and regulatory attitudes have facilitated the development of the third-party sector in certain markets, slowed development in others, and rendered the sector virtually non-existent, most notably in Spain. We'll also discuss the prospects for change through the expansion of cross-border servicing; take a look at how bank consolidation will impact third-party servicing and profile the leading players across European markets.
	NETHERLANDS The Dutch market's early adoption of securitisation in the mid '90s, compared to the rest of Continental European countries, has led to some of the most complex and unique mortgage products in Europe. The Dutch market is also renowned for embracing third-party mortgage administration as early as 1996. Thus it should be no surprise that, despite being headquarters for three of the world's largest banks in a small country of 17 million people, the Dutch market was among the first to experience the post-Euro wave of foreign market entrants. We see the ability to outsource the administrative process to third parties as one of the most important drivers for entry into any market. Clearly the presence of three outsourcing options led (in order of size) by STATER, Quion and most recently, Ordina says much about the commercial dynamics of the Dutch market. This session takes a look at how the Dutch experience will spread across other European countries.
PANEL	PETER BESUIJEN, Managing Director, Quion Group BV RYSZARD KRUSZEL, Director XXL, Stater NV ROB VAN DEN BERG, Director, GMAC-RFC Nederland TOM VAN DER GEEST, Director, Hypsotech Management Consultancy BV
RECOMMENDED READING	FitchRatings, Rating European Mortgage Loan Servicers - the Netherlands Market Addendum, European Structured Finance Criteria Report, 26 Nov 2004
	GERMANY The German market was relatively slow to embrace third-party servicing, primarily due to the three pillar banking system and the related preference for shared utilities among banking group sectors. Despite the early presence of Hypotheken-Management (now owned by KreditWerk) in 1998 and the cross-border entry of STATER in 1999, the implosion of the German mortgage banks and explosion of NPLs has led to a market dominated by special servicing ventures in the past 3 years. The experience gained by workouts on NPL loans has created a natural position for special servicers gearing up for the expansion and entrance of non-conforming and sub-prime lenders. This session looks at how Europe's largest mortgage market views the importance of servicing today, and how new ventures are lining up to capitalise on the changes to come.
PANEL	CLARENCE DIXON, Managing Director - Continental Europe, Crown Mortgage Management GERD KOIDL, Board of Directors, HSH Nordbank JÖRGEN LOUW-PEDERSEN CHRISTIAN FEIN, Head of Europace International, Hypoport AG
RECOMMENDED READING	FitchRatings, Rating European Mortgage Loan Servicers - German Market Addendum, European Structured Finance Criteria Report, 26 Nov 2004
	SPAIN The first European country to utilise both covered bonds and RMBS in volumes that now exceed the UK, we're bullish on Spain (pun intended). So bullish, in fact, that we launched our signature event in Madrid in 2002 to point out why that significance would have such a profound impact on European and global mortgage markets moving forward. In case any of you missed it, we're going back to Madrid for our 5 year anniversary this October to prove another point (and you'll have to be there to see it). In the meantime, we'll give you a piece of the puzzle. Today, we see the most striking feature of the Spanish market as being the lack of complete third-party servicing alternatives. Although parts of the value chain can be outsourced in Spain, to date no solution exists for cross-border lenders to outsource their entire back-office. We know how many lenders want to get into the Spanish market, but what has been holding them back? And why is the cost of entry so unusually high? We'll let you make your own decisions upon hearing from key market participants.
PANEL	BARALIDES ALBERDI, Consultant / Associate Partner, EuroCatalyst BV ERIC KLESTA, Chief Operating Officer, UCI OTHERS TO BE ANNOUNCED
RECOMMENDED READING	FitchRatings, Rating European Mortgage Loan Servicers - the Spanish Market Addendum, European Structured Finance Criteria Report, 15 September 2005

13:00	LUNCH

13:45	'I CAN GET IT FOR YOU WHOLESALE'
SESSION 4	Servicing considerations for whole loan sales and trades
PANEL	CRAIG BERESFORD, Director of Asset Sales - Capital Markets, GMAC-RFC UK Ltd. GEERTJAN JELLEMA, Director, Stater Mortgage Investment Services GORDON JOLLY, Managing Director, Amber Homeloans Limited BRIAN KANE, Managing Director, Structured Finance Ratings Services, Standard & Poor's PATRICK CURRIE, Chief Executive, Hometrack Data Systems
	As European funding alternatives continue to diversify and balance sheet re-engineering moves into high-gear, whole loan sales are an effective funding alternative, allowing lenders to accelerate new business and achieve lending targets through the bulk acquisition of whole loan portfolios. Loan sales provide a more cost-effective way for lenders to increase assets and diversify their overall book while reducing fixed costs or strategies that conflict with core operations and capabilities. For intermediaries, whole loan sales provide a wider range and consistent source of products. Finally, customers benefit from greater choice and more competitive and transparent products, creating a win/win solution across the value chain. In the past two years investment banks have become large portfolio buyers as product to securitise through their own conduits, increasing the premiums paid for portfolios in a robust seller's market. It's a terrific "blue sky" scenario across Europe with one small problem holding back the trend – the lack of third-party servicers for portfolio buyers. This session features top buyers, sellers and current servicers leading the trend that will fundamentally alter the European lending sector in the next decade. In particular, we'll be discussing: Motivation for buying and selling with a discussion of key transactions across Europe Servicing transfers of new portfolios Improvements in data sophistication and cost including credit scoring and automated property valuation models (AVMs) Changes in regulation that simplifies the documentation required for portfolio sales Current efforts to increase portfolio transparency, standardize sale contracts and reduce transaction time.

14:45	REFRESHMENT BREAK

15:00	'GREAT EXPECTATIONS'
SESSION 5	As non-conforming / sub-prime lending expands across Europe, are special servicing capabilities growing along with it?
PANEL	PAUL FENN, Development Director, Homeloan Management Limited HOESLI LABHART, Director, Principal Finance, Citigroup DIANE PENDLEY, Managing Director, FitchRatings JODI VAN BREDA, AVP/Analyst, Moody's Investors Service OTHERS TO BE ANNOUNCED
	Definitions of "non-conforming" and "sub-prime lending" vary as greatly throughout Europe as the number of languages spoken, and despite the possible repetition are often placed together as we have done in title of this session to refer to anything that falls outside of the category of "prime". We assume by now that everyone has read the April, 2005 report on "Risk and Funding in European Residential Mortgages," in which Mercer Oliver Wyman convincingly identifies a 15% market expansion of untapped opportunity equivalent to €500 billion of lending in Europe. Before you run off to capitalize on it, please read further. Outside of the UK where the sub-prime market is the most evolved (if not saturated), the greatest opportunities are found in Germany, Italy, France and Spain. On the Continent, if you were to describe your own working definition of a non-conforming loan to most lenders, they will often tell you that whatever you have described "happens" in their market although not as frequently, but due to the sensitive nature of relationship banking it is not publicly marketed as such. Occupancy status (Buy-to-Let), how high lenders go on LTVs, how much documentation is provided for underwriting, and borrowers with impaired (or non-existent) credit histories all fall outside of the range of "prime" mortgages and onto the widening non-conforming/sub-prime lending spectrum. The best way to understand whether or not a mortgage is considered a higher risk by the originating institution is to evaluate how those loans are currently serviced. Why? Because we assume by now that everyone understands the direct correlation between high risk and/or high LTV loans and default frequencies. Or do they? This session explains how special servicing is distinct from other servicing roles and what skill sets and strategies are required to establish special servicing departments and/or separate operations; why special servicing is crucial to the expansion of non-conforming/sub-prime lending throughout Europe, and hear from the leading players (both originators and third parties) on servicing considerations in product development and proactive servicing actions that begin much earlier in the value chain, once loans are funded. In short, where the Mercer Oliver Wyman report identified "great expectations" for the expansion of high-risk lending, this session reminds everyone of the equally "great expectations" placed upon the servicing of the higher-risk sector.

16:00	'CRASH'
SESSION 6	When High Street meets Wall Street in The City, which way do you turn?
PANEL	ROB BIER, Chairman, Sparck Hypotheken MIKE CULHANE, Chairman & Chief Executive Officer, Oakwood Group BILL DUDGEON, Managing Director, db Mortgages DAVID GRANT, Commercial Director, Homeloan Management Limited JOHN MALTBY, Chief Executive, Kensington Group TREVOR POTHECARY, Chairman, Mortgages plc
	This session moves beyond last year's lively discussion, "Fighting in the food chain and survival of the fittest", and zooms in on the Darwinist transformation playing out along the front-end of the mortgage value chain across major European markets as a battle over mortgage distribution. With more than 10 formidable new lenders entering the non-conforming sector over a short period of time, the UK market is the best place to watch the drama unfold. The discussion will provide ideas and inspiration for some and a warning for others, but no one in the European mortgage industry remains untouched by its implications. With the churn-driven 10-year prime market coming to an end, mainstream lenders face a struggle between generating profit from their books vs. regulatory pressure to price for risk. Enter the investment bank conduits and principal finance. The same regulatory hurdles that many anticipated to act as barriers to entry have instead provided the market stability that attracts investors. The result is a clash between the relationship-driven, operationally expensive "High Street" approach to mortgages vs. the operationally lean, commoditization-driven conduit lending model. The ultimate showdown is the battle over distribution for those closest to the largest volumes of customers. The nature of non-conforming lending demands increased labour and documentation in the mortgage fulfilment process, a need that has risen to the growth of packagers who specialize in collecting and organising information faster, cheaper and more efficiently. Morgan Stanley's recent acquisition of packager Advantage Home Loans and the tieup between Investec and Infinity Mortgages to create Unity Homeloans (lending arm of the Professional Mortgage Packager's Alliance) shows exactly where battle lines are being drawn. With all of the new competition entering the lending market, which parties will be making the credit decisions, process and administer the volume, collect the payments, provide loss mitigation and arrears management? Stay tuned for a provocative session to see who stands to benefit most from the fallout, how they intend to pursue it and how the third-party sector will change as a result.
RECOMMENDED READING	FitchRatings, Rating European Mortgage Loan Servicers - the UK Market Addendum, European Structured Finance Criteria Report, 25 May 2005

DAY 1 (MAY 31): 'THE WORLD IS NOT ENOUGH'
Servicing for commercial real estate, CMBS, and covered bonds