2. Operational Efficiencies and Product Standardization: Two Keys to Success in Mortgage Lending Romanian-American Enterprise Fund & Shorebank Advisory Services 20.02.2002

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