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EuropeServicing 2006
More than 200 people from across Europe gathered at the British Academy of Film and Television Arts in London for EuropeServicing 2006 to discuss their perceptions of the current state of servicing, processing and administration in Europe and the directions in which they see it going.
EuropeServicing 2006 London (click on thumbnail to visit event website and view the program)
Led by Host Partners FitchRatings, Morgan Stanley Mortgage Servicing and Homeloan Management Limited, EuropeServicing’s elite list of partners in 2006 included Katten Muchin Rosenman Cornish LLP, Europe’s leading law firm focusing on real estate and servicing issues, Capmark Europe (formerly GMACCM-Europe), Europe’s largest commercial third-party servicer, Standard & Poor’s, Hatfield Philips International, Moody’s Investor’s Service, and Stater International Mortgage Services, as well as exhibitors CB Richard Ellis Loan Servicing Limited, Global Realty Outsourcing and Quion.
Day one, subtitled, “The World is Not Enough” focused on servicing for commercial real estate, CMBS and covered bonds, while day two featured mortgage processing, administration, and servicing for residential mortgage loans and RMBS under the theme “Tomorrow Never Dies”.
Some notable sessions included: “From ‘Modern Times’ to ‘The Matrix’- changing perspectives on servicing from the ‘originator’s back office’ to ‘the investor’s front office’ and the currency of information” and ” ‘Lost in Translation’- the economics of outsourcing and ethics of off-shoring in European mortgage markets.”
Throughout the two-day program, three key concepts made their way into each session.
Although housing and real estate are fundamentally local activities, their funding is increasingly global. Despite natural differences among national markets (and indeed even among different states in the US), mortgage markets vary in form – but not function. When looking at a wider picture of the mortgage and real estate value chain, servicing is the bridge between primary and secondary markets. The best way to understand how mortgage markets really work – and to make them more efficient – is to view that value chain from the servicing perspective.
The key drivers for cross-border lending in Europe are securitization, the ability to share risk and the ability to outsource servicing to third parties. Both securitization and mortgage insurance/monoline schemes are advancing much faster than third-party servicing. There must be more efforts, initiatives and assistance – beyond the pioneering firms themselves – toward developing the third-party sector
The loan-level and portfolio-wide information that servicers manage is the ultimate currency of the mortgage and real estate industry. As such, servicers are the repository of that information. The perception of servicing must change from the outdated view of it as the “originator’s back office” to a more accurate one of servicing as the shareholder and investor’s front office.