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Operational Efficiencies and Product Standardization: Two Keys to Success in Mortgage Lending Romanian-American Enterprise Fund & Shorebank Advisory Services.

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Presentation on theme: "Operational Efficiencies and Product Standardization: Two Keys to Success in Mortgage Lending Romanian-American Enterprise Fund & Shorebank Advisory Services."— Presentation transcript:

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2 Operational Efficiencies and Product Standardization: Two Keys to Success in Mortgage Lending Romanian-American Enterprise Fund & Shorebank Advisory Services

3 Operational Efficiencies Internal Bank Decision Must Be Client Focused –Transparent information regarding fees –Full information upfront about what documents are required –Establish acceptable turnaround time (example: 3 days between initial client contact and lending decision)

4 Standardization Why? - Standardization is key in asset securitization which is key to obtaining sources of long term financing. Existing Sources of Financing: –Equity –Long Term Deposits –Loans from Parents/IFI’s –(all of these are far from efficient in terms of attracting appropriate funding) Securitization Appears Quite Favourable

5 What Areas can be Standardized Now? Product Type –Term, currency, fixed versus floating, repayment characteristics Contracts/Forms –Mortgage contracts, credit contracts, purchase/sale agreements, (mortgage law 190 or banking law) Loan Sizes –Should be “similar” Property Types –Should be “similar”

6 Difficulties Banks may have varying methodologies/ competencies in measuring risk. Capital Markets undeveloped in Romania (but should change in future) Critical Mass needed can be high (USD 30 million for placement)

7 Conclusion Securitizing mortgage portfolios is especially required in Romania since access to funding is difficult to obtain. This can only be done though a standardized approach across banks and through internal operational efficiencies.

8 Invitation We invite banks to talk with us about further co-operation in establishing common industry-wide standards now - while the industry is still in its formative stagesMULTUMESC


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