2005: EUROPESERVICING | AMSTERDAM

By 2005, so little attention was paid to servicing that we created a new event, EUROPESERVICING, to motivate underappreciated services and drive improvements in the sector throughout Europe. It is the first time that an event dedicated to servicing in Europe was ever held. One of the main advertisements for the event stated, “Sure, Europe has witnessed unprecedented growth in mortgage lending over the past 5 years. But portfolios are seasoning and operational losses can no longer be offset against rising house prices. Where will you run to maximize your growth and minimize your risk?” At the bottom of the advert, we included a reference to the Nordic IN Focus event: “If we can make covered bonds sexy, imagine what we can do for servicing!”

In opening comments I delivered a “Servicing Manifesto” that called for redefining servicing from “the originator’s back office” to the “homeowner and investors’ front office”. My primary argument was the following: “It is ridiculous that the most compensation in mortgage lending always goes to those on the front end – the loan officers and originators who lend the money – or in essence, give the money away. Those who are the least compensated – the servicers – are the ones actually getting the money back by collecting the payments. Servicers are not the originators’ back office. That concept is outdated, diminishes the role and value of servicing and de-motivates the entire sector. Servicers are the front office for investors and homeowners”. The speech elicited rousing cheers, and I really should have quit while I was ahead. But I didn’t. My next words were, “For too long, servicers have been treated like the fat kids on the soccer team. To be fair, some continue to act like it.” In that moment, I lost most of my Brownie points.

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