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					              2004 MBA Convention
           International Opportunities
                      Panel



            Sponsored by The PMI Group, Inc.
MBA Logo
                 2004 MBA Convention
           International Opportunities Panel


                Tony Porter
           EVP, Managing Director
            The PMI Group, Inc.

           Sponsored by The PMI Group, Inc.
MBA Logo
           2002 Top 10 Mortgage Markets
                               Mortgage Debt Outstanding: US$11.3 trillion
                   Netherlands                 Australia
                                                         France Spain
                       3%                        2%
                Canada                                     2%    2%      Denmark
                  3%                                                       1%
              Germany
                8%
                                                                        United States
                                                                            58%
          United
         Kingdom
           8%

                               Japan
                                13%
Source: Federal Reserve, EMF, Deloitte, Reserve Bank of Australia

    MBA Logo
                         Homeownership Rates

                                        Germany    41%
                                             Denmark 51%
                                            Netherlands 53%
                                                   France
                                                            56%
                                                     Japan     60%
                                                        Canada    66%
                                                    United States 68%
                                                   United Kingdom 69%
                                                         Australia 69%
                                                                   Spain          81%

           0%                   20%                   40%             60%   80%         100%
Source: EMF, US Census Bureau, IUHF, CMHC, and internal PMI sources

    MBA Logo
   Mortgage Debt Outstanding/GDP
                          2002 Mortgage Debt Outstanding as a % of GDP
                                  88%
        90%                                  82%
        80%
        70%                                               62% 60%
        60%                                          United Kingdom
                                                                                         51% 50%
                             Netherlands




        50%
                                                                      United States                          42%
                                                                                                                      38%
                                           Denmark




                                                                                                                              35%
                                                                                      Germany
        40%



                                                                                                Australia

                                                                                                            Canada
        30%




                                                                                                                     Spain
                                                                                                                                      19%




                                                                                                                             Japan
        20%




                                                                                                                                     France
        10%
          0%
Source: World Bank, Federal Reserve, IUHF, EMF, Deloitte, Reserve Bank of Australia

    MBA Logo
  Comparing Major Housing Statistics

           90%                         Homeownership Rate

           80%                         Outstanding Mortgage
                                       Debt to GDP
           70%
           60%
           50%
           40%
           30%
           20%
           10%
           0%
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MBA Logo
                    Common Questions
     Why should we expand internationally?

     Should we look to big markets, where there is more room to
           find a niche?

     Should we look at emerging markets, where we can enter
           early and define market practices to establish dominance?

     Should we focus on transition markets where the market
           development work is done and business is poised for growth?

     Or is the best strategy simply to focus on our home market
           and compete where we know best?

MBA Logo
   What Makes Markets Attractive?
       UNATTRACTIVE                     ATTRACTIVE
                        Market Size
                       Growth Rate
                      Profit Margins
                       Competition        Can my core
                       Legal System     competencies tilt
                 Borrower Quality         the balance?
                        Information
                  Political Stability
                Economic Stability
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                 2004 MBA Convention
           International Opportunities Panel

   International Expansion: The Case
             of Countrywide
                    Michael Lea
            Cardiff Economic Consulting




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           Overview of Presentation
    Countrywide Financial Corp. – The Leading US
     Mortgage Lender
    Competitive Strengths and Exportable Skills
    International Expansion – Rationale, Market
     Selection and Business Model
    UK Market Overview
    Making the Business Model Work: Challenges
     and Solutions

MBA Logo
   Countrywide Financial Corp. US
  Largest Mortgage Originator
   ($176 billion funded first half
   2004)                                         Loan
                                                Closing
  Servicing Portfolio $726 billion             Services
                                                         Capital
                                      Banking
   (6/30/04)                                    Mortgage Markets
                                                Banking
  More Than 500 Branches,
   39,000 Staff, 30,000 Brokers                     Insurance
                                          Global
                                                     Services
  Acknowledged Technology
   Leader
  Top 10 Mortgage Backed
   Securities (MBS) Dealer
MBA Logo
              CFC Core Strategy
To enable its employees to deliver best-of-class and value-
added products and services to its customers through
superior technology and processes.




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                   CFC Strengths
 Focus: Mortgage Banking As The Core
  Business; Unparalleled Understanding of
  Mortgage Processes and Costs
 Technology: Proprietary, State-of-the Art
  Systems
      – Pioneer in automated underwriting, valuation, Use of
        Internet
 Securitization: Market Leader in MBS Issuance
  and Trading
 Financial Strength: $22 Billion Market
  Capitalization; Regulated Entity
MBA Logo
 Learning From US Used In Global Arena
 First Point Of Entry Has Been The UK
      – Key attributes: size, language, open competitive
        market, need for cost reduction and new technology
 Three Primary UK Businesses:
      – Global Home Loans: Market Leading Third Party
        Administration
      – UK Valuation: Market Creator and Leader in
        Automated Property Valuation
      – CFC Technology Solutions: Providers of State of the
        Art, End-To-End Mortgage Technology
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                      Global Home Loans
       May 1999        September 2000         April 2001        November 2002

   GHL established     Barclays acquired    GHL facilitated        Barclays
    in venture with        Woolwich          launch of new        transition
       Woolwich                            Barclays products


           1999              2000                2001               2002


  GHL in 2000                              GHL in 2003
  • over 15,000 applications per           • over 26,000 applications per
    month                                    month
  • $54 billion servicing portfolio        • $110 billion servicing portfolio
  • over 760,000 loans                     • Nearly 1.2 million loans

                                           • largest end-to-end third party
MBA Logo                                      processor in the UK
                   Global Technology
 CFC Technology Solutions/GHL
  Have Developed a Comprehensive
  Suite of Mortgage Processing
  Systems For UK Market
 Systems Based On Leading Edge
  Technology Investments Made By
  Countrywide In The US
 Systems Cover Complete Mortgage
  Chain
 Designed To „Plug And Play‟ With
  Legacy Systems
 Systems Use Proven Technologies
MBA Logo
           UK Market Overview




MBA Logo
            The UK Mortgage Market Is the
                World’s Third Largest
                                                    2002 Mortgage Debt Outstanding

                       7000
                              6450


                       6000



                       5000



                       4000
           $ billion




                       3000



                       2000
                                     1500


                       1000                   890         880

                                                                       350          325          260         245     230
                                                                                                                               120
                         0
                              US     Japan    United    Germany      Canada     Netherlands   Australia     France   Spain   Denmark
                                             Kingdom

MBA Logo                                       Source: Federal Reserve, EMF, Deloitte, Reserve Bank of Australia
                 The UK Market Has Enjoyed
                Robust Growth in Recent Years
 UK mortgage loan balances outstanding (£bn)                          Gross lending and redemptions (£bn)



                                                                                                                        269
                                                              767

                                                                                                                219
                                                       671

                                               591                                                      160
                                 536
                                                                                   114        120
                    494
      457                                                                 89




                                                                         (64)
                                                                                    (76)      (79)
                                                                                                        (106)

                                                                                                                (140)

                                                                                                                        (173)




      1998         1999          2000         2001     2002   2003E      1998      1999      2000       2001    2002    2003E



Source: Bank of England, Council of Mortgage Lenders
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       The UK Market Is Concentrated
Total mortgage balances outstanding, end year                         Gross mortgage lending, in year
                                                               Est.                                                               Est.
                                                            market                                                             market
Rank        Name of Group                       £ billion    share    Rank                                        £ billion     share
1      (1) HBOS                                    150.0     22.4%    1      (1)    HBOS                               56.8     26.0%
2      (2) Abbey National                            80.1    11.9%    2      (2)    Abbey National                     22.8     10.4%
3      (3) Lloyds TSB                                62.5     9.3%    3      (3)    Barclays                           21.3      9.8%
4      (4) Barclays                                  57.7     8.6%    4      (4)    Lloyds TSB                         19.0      8.7%
5      (5) Nationwide BS                             57.2     8.5%    5      (5)    Nationwide BS                      17.4      8.0%
6      (6) The Royal Bank of Scotland                42.1     6.3%    6      (6)    The Royal Bank of Scotland3        13.5      6.2%
7      (7) Northern Rock                             30.0     4.5%    7      (7)    Northern Rock                      10.5      4.8%
8      (8) Alliance & Leicester                      23.6     3.5%    8      (9)    HSBC Bank                            9.4     4.3%
9      (9) HSBC Bank                                 20.3     3.0%    9      (8)    Alliance & Leicester                 6.4     2.9%
10     (10) Bradford & Bingley                       16.8     2.5%    10     (11)   Britannia BS3                        4.3     2.0%

   2002: Source CML



  MBA Logo
                                       UK Mortgage Market Drivers
                                                             UK Tenure by Type                                                                                                          House Price Trends: UK and Select Regions

                 80.0                                                                                                                                              25.0



                 70.0

                                                                                                                                                                   20.0
                 60.0




                                                                                                                                     % change from previous year
                 50.0
% of Dwellings




                                                                                                                                                                   15.0


                 40.0


                                                                                                                                                                   10.0
                 30.0



                 20.0
                                                                                                                                                                    5.0

                 10.0



                  0.0                                                                                                                                               -
                        1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001                                          1995   1996    1997       1998            1999           2000              2001        2002   2003
                                                                        Source: ODPM                                                                                                                            Source: OPDM

                              Owner-Occupied % of       Private Rented % of      Housing Association % of       Public Rented % of                                                       London    South East         South West          Scotland          UK




                 MBA Logo
                          Low Interest Rates Have
                        Contributed to Market Growth
                                                             UK Interest Rate Trends

                16.00



                14.00



                12.00



                10.00
   Percentage




                 8.00



                 6.00



                 4.00



                 2.00



                  -
                        1990   1991   1992   1993   1994      1995        1996       1997       1998         1999   2000   2001   2002   2003   2004Q1
                                                                     Source: Office of National Statistics

                                                           base rate        building society average mortgage rate

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                                                 Securitization Is Growing
                                                                  UK Residential Mortgage Securitization

                                                60,000                                                                                           35



                                                                                                                                                 30
                                                50,000
           Funded Transactions (Euro million)




                                                                                                                                                 25
                                                40,000




                                                                                                                                                      # of transactions
                                                                                                                                                 20

                                                30,000

                                                                                                                                                 15


                                                20,000
                                                                                                                                                 10


                                                10,000
                                                                                                                                                 5



                                                   -                                                                                             0
                                                         1997   1998           1999            2000             2001               2002   2003
                                                                                       Source: Merrill Lynch

                                                                       Residential Securitization              # of Transactions

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  Most UK Mortgages Are Variable
              Rate
                                                                                UK Mortgages By Type

                               90                                                                                                                                9.00


                               80                                                                                                                                8.00


                               70                                                                                                                                7.00
    % of new loans by number




                               60                                                                                                                                6.00




                                                                                                                                                                        Mortgage Interest Rate
                               50                                                                                                                                5.00


                               40                                                                                                                                4.00


                               30                                                                                                                                3.00


                               20                                                                                                                                2.00


                               10                                                                                                                                1.00


                               0                                                                                                                                 0.00
                                    1993   1994   1995         1996            1997          1998            1999          2000           2001   2002*   2003*
                                                                                         Source: CML
                                                     2002 & 2003 do not add to 100 reflecting capped rate category (4% and 3% respectively)

                                                                 % of total fixed rate    % of total variable rate    variable rate


MBA Logo
           The Outsourcing Challenge
  Over 30% Of the UK Market Uses Outsourcing
      – Major lenders have made their decisions
  Regulation Has Slowed the Adoption of Outsourcing
  Lenders Are Seeking a Large Reduction In Cost Which Is
   Difficult to Achieve in the UK
      – Off-shore processing is a way to do this
  Opportunities Exist With Component Processing and
   Smaller Lenders
      – New products, purchased portfolios
      – Special servicing, master servicing
  European Outsourcing Has Formidable Challenges
       Labor is a fixed factor of production

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                 2004 MBA Convention
           International Opportunities Panel


                 Tony Gill
             Executive Director
           Macquarie Bank Limited

           Sponsored by The PMI Group, Inc.


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  MBL, MSL and the PUMA program
   Macquarie
                        Regulated & Licensed Australian Bank and Authorised
  Bank Limited
                         Deposit Taking Institution
     (MBL)
                        Rating:      A / A2 / A+ (S&P / Moody’s / Fitch)
                                      A1 / P1 / F1 (S&P / Moody’s / Fitch)
                        Total assets (Mar 04) = A$44 billion
 100% MBL Subsidiary
                        Additional Assets Under Management (Mar 04) = A$63 billion
                        Over 5,700 Employees located in 23 countries, including operations throughout
                         Asia, Europe and North America
   Macquarie
 Securitisation  Established in 1991
 Limited (MSL)  Acts as master servicer, program manager and arranger of bond issues

     Manager            Australia’s largest and one of the most frequently issuing RMBS programs (A$23.6
                         bn issued to date)
    PUMA
   Program




MBA Logo
 Diverse global asset portfolio & operations
USA Assets include:
 Detroit Windsor Tunnel

 SR125 South – San Diego

 Parking Company of          Canada                                           UK
                                 407 ETR -          Portugal                     M6 Toll road              Sweden
 America Airports                 Toronto                Algarve toll road       Bristol Airport              Arlanda                Germany
                                                                                                                 Express Rail               Warnow
 Michigan Electric               Cardinal Power                                                                                        
                                                        Norte Litoral toll      Birmingham
                                                          road                     Airport                       Link                       Tunnel
 Transmission Co.
 Macquarie Prologis

                                                                                                                                                     South Korea
                                                                                                                                                        Soojungsan Tunnel
USA Operations include:                                                                                                                                 Kwangju toll road
 Corporate finance &                                                                                                                                   Daegu-Busan
                                                                                                                                                         Expressway
 advisory                                                                                                                                               Baekyang Tunnel
 Infrastructure finance &                                                                                                                              Machang Bridge

  advisory
 Infrastructure funds

  management
 Metals & mining finance,

  structuring and trading
 Agricultural commodities
                                                                                                                                Australia
  marketing, trading &                Italy
                                                                                   Africa
                                                                                                                                   Sydney Airport
                                                                                      N3 toll road
 structuring                             Rome Airport
                                                                                      N4 toll road
                                                                                                                                   Eastern Distributor
                                         Genoa Airport                                                                            M2, M4, M5,
 Golf course / residential              Lamezia
                                                                                      Kilimanjaro Airport
                                                                                                                                    westlink M7 toll roads
                                                                                       (Tanzania)
  development                             Terme Airport
                                                                                      Airport Co. of SA
 Mortgage origination

                                                                                       “Largest owner of toll roads in the world”

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             Macquarie Securitised Lending
  North America                      Europe                            China
 Established 2002                Target 2005          Established 2001
 Correspondent and                                     Joint venture business
wholesale lending                                       45 staff
 Currently 21 states, 30                               Introductory business
states by 03/05                                        agent in Shanghai
 128 employees                                         Settled loans >1,500 P.A.
 Settled loans US$1.4bn
                       Memphis
                                                            Shanghai




                                                           Australia
                                                  Established in 1991
                                                  Mortgages and Equity Lending
                                                  400+ staff           Sydney

                                                  Portfolio > AUD$15bn
                                                  PUMA securitisation program

  MBA Logo
  Australia & the mortgage market
                                                                                                                 Population 20
                                                Ho us ing Lo an Appro vals                                      million in an area
                                                                                                                size of USA
                                                      Currently AUD$15bn per month
                             20,000                                                                              Approx 69% of
                                                                                                                residences are
                             18,000                                                           Ow ner-Occupied
                                                                                                                owner occupied
                                                                                              Investment
                             16,000
                                                                                                                 Wide range of
                                                                                              Total Market
                                                                                                                products in a
     Value in AUD Millions




                             14,000                                                           Approvals
                                                                                                                competitive market
                             12,000
                                                                                                                 Doubling of
                             10,000
                                                                                                                property values
                              8,000                                                                             since 1998 has
                                                                                                                fuelled mortgage
                              6,000
                                                                                                                market
                              4,000
                                                                                                                 Investment
                              2,000
                                                                                                                loans accounted
                                                                                                                for nearly 1/3 of all
                                -                                                                               loans in 2003
                                    Jan-00   Jan-01      Jan-02       Jan-03         Jan-04
                                                                                                                 Full recourse to
  Source: Australian Bureau of Statistics                                                                       the borrower in
                                                                                                                event of default

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           Low interest rate environment
     Typical loan is floating rate
     Rate is set at lender‟s discretion – not linked to any specific index
     Fixed rates:
              are available for a set period usually 1,3 or 5 years
              reverts to variable or re-fix
              mark to market prepayment costs are charged to the borrower
     Interest paid is tax deductible for investment loans only




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   Market still dominated by Major banks

                                       Other lenders
             Wholesale lenders
                                          4%
Permanent building   15%
    societies    3%                                                          Banks
                                                                             78%




    Lending sourced by brokers has increased significantly to approx 30% of all new loans
    Expected to increase to 50% within next 3 years
    Asset retention due to churn is a key challenge



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MSL – Single largest issuer in Australia
 PUMA Total issuance of A$23.6b, through 25                                                                                                                                                     RMBS account for 90% of all Australian
  separate issues since 1994 (Domestic, Euro &                                                                                                                                                    Securitisation
  Global)                                                                                                                                                                                        Roughly 1 in 5 loans are securitised
 Combination of private warehouse, commercial                                                                                                                                                   Lenders mortgage insurance is a key factor in
  paper, bond issue                                                                                                                                                                               securitisation


                 2500
                                                                                                                                                                                                                                            2,344


                                                                                                                                                                                                                                                                                                                  1,904
                 2000
                                                                                                                                                                                                                                                          1,802                       1,793

                                                                                                                                                                                                                                                                                                                                        1,571
                 1500
                                                                                                                                                                1,321                          1,290
           A$m




                                                                                                                                     900                                                                                                                                                                                                                   1,000
                 1000
                                                                                           800                                                                                                                 750 750                                                  750                                                                                                750
                                                  700                                                                                                                           725                                                                                                                 700                         700
                                                               600
                                                                                                         500 500                                  500
                 500
                                     300                                     250
                        200

                   0
                                                  P-3 Jun-95




                                                                                                                                                                                                                                                           G-2 Jun-02



                                                                                                                                                                                                                                                                                       G-3 Jan-03




                                                                                                                                                                                                                                                                                                                                              S-1 Jun-04
                                                                                                                                                  P-6B Jun-97



                                                                                                                                                                                E-2 2 Jul-98



                                                                                                                                                                                                               E-3 2 Jul-99




                                                                                                                                                                                                                                                                                                    P-8B Jul-03




                                                                                                                                                                                                                                                                                                                                                            P-10A Jul-04
                        P-1 Dec-94

                                     P-2 Feb-95




                                                                             P-4B Dec-95



                                                                                                         P-5B Sep-96

                                                                                                                       P-6A Feb-97

                                                                                                                                     E-1 Mar-97



                                                                                                                                                                 E-2 1 Dec-97




                                                                                                                                                                                                                              P-7A Feb-00

                                                                                                                                                                                                                                             G-1 Sep-01




                                                                                                                                                                                                                                                                                                                   G-4 Aug-03
                                                               P-4A Oct-95



                                                                                           P-5A May-96




                                                                                                                                                                                                E-3 1 Mar-99




                                                                                                                                                                                                                                                                        P-8A Oct-02




                                                                                                                                                                                                                                                                                                                                P-9A Oct-03




                                                                                                                                                                                                                                                                                                                                                                           P-10B Oct-04
                                      AUD Issuances

                                     USD Issuances
MBA Logo
               MSL – Key success factors
           Growth in monthly approvals as percentage of January 00
    600


                                                       Core competencies
    500
                                                        Product Innovation
                     Macquarie

    400              Market                             Distribution
                                                         expertise
                                                        End-to-end service
    300    %
                                                         provider
                                                        Flexible business
    200
                                                         philosophy
                                                        Servicing of brokers
    100
                                                         & borrowers. Rated
                                                         the No. 2 service
     -                                                   provider by the
                                                         Australian mortgage
                                                         broking industry


MBA Logo
          International expansion criteria
                               Market Structure
                               Niche opportunities in established
                               market
                                  Changing regulatory environment
Product &                         Lenders mortgage insurance                     Housing &
Distribution                                                                      Mortgage Market
   Product types/range                                                              Size

   Distribution networks                                                            Mortgages vs. GDP

   Opportunity to innovate                                                          Ease of entry & exit




Funding/Securitisation
      Supportive regulatory                                    Risk Management
     framework
                                                                    Good title
                                                                  Acceptable credit
                                                                 data
    MBA Logo
          MSL expansion into US market
                                Market Structure              
                                Niche opportunities in established
                                market
                                   Changing regulatory environment
Product &
                                  Lenders mortgage insurance                     Housing &            
Distribution                                                                       Mortgage Market
   Product types/range                                                               Size

   Distribution networks                                                             Mortgages vs. GDP

   Opportunity to innovate                                                           Ease of entry & exit




      Funding/Securitisation                                    Risk Management
                                                                  Risk Management                
       Supportive regulatory
      framework                                                      Good title
                                                                   Acceptable credit
    MBA Logo
                                                                  data
                              China & the mortgage market
                         25                                                         Key data
                                                                         Pop. China = 1.2 billion
                         20
  Population (million)




                                                                         Pop. USA = 294 million
                         15
                                                                          Several “tier 2” cities with
                         10                                               population of 8 to 10 million

                         5                                                Shift from government to
                                                                          private home ownership
                         0
                               Australia   Shanghai        Beijing

 Heavily regulated – products, interest rates,        Risk management framework still
lenders, repayment terms                              developing
 Mortgage market established 1999                          21 independent title registration
                                                           offices in Shanghai alone
 Outstanding mortgage balance at 2003 RMB
1.2 trillion (USD 145bn)                                    No formal credit data
 No concept of non bank lending                       Securitisation non-existent
 MBA Logo
                              Two tier market
                                Chinese Banks                Foreign Lenders

           Type of borrower     Local & Overseas             Overseas passport holders
                                                             only

           Product              Standard for all borrowers   Standard for all borrowers
                                20 yr fixed term             20-30 yr fixed term
                                Minimal features             Minimal features

           Currency             RMB only                     HKD or USD only


           Interest rates       Fixed 5.04% all lenders      Variable based on
                                                              Customer quality
                                                              Size of deposit
                                                              Currently 2.75 – 4% for
                                                               USD loans




MBA Logo
               Property values are fuelling
                     market growth


 Recent share market losses mean investors favouring property
 Capital growth over the last 3 years ranged from 20-50% P.A.
 Not uncommon for investors to purchase property purely for capital growth. Properties
  remain unoccupied
 Greater than 10% year to date growth despite government policy to introduce more
  controlled growth
 Government imposed restrictions to limit growth to 15-18% in Shanghai market




 MBA Logo
                                     MSL in China

                                     Market Structure
                                       Niche opportunities in established market   
                                       Changing regulatory environment – WTO       
                                        2007
Product &                              Lenders mortgage insurance    ?                 Housing &
Distribution                                                                            Mortgage Market
   Product types/range      X
                                                                                             Size   
   Distribution networks ?                                                                  Mortgages vs. GDP      
                                                                                              Ease of entry & exit   X
                          
                                                                                        
 Opportunity to innovate




              Funding/Securitisation                                         Risk Management
             Supportive regulatory framework    ?                              Good title   
                                                                              Acceptable credit         ?
                                                                              data
    MBA Logo
                              Where next?

US                                  Europe                      China
 Controlled growth                  Commence operations        Continually assess
through geographical                by 2005                     changing market for
expansion and product                                           opportunities in preparation
innovation                                                      for entry into WTO in 2007




      Further expansion                                     Australia
       “Horizon scanning” for opportunities that            Client service, client
      match exportable core competencies                    service, client service
                                                             Continued focus on
                                                            quality brokers and
                                                            originators
                                                             Product diversification

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                                GMAC-RFC
                             Business Overview

                           Prepared for:
              International Panel - MBA Convention
 Chris Nordeen ‟ President, International Business
 Group


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      A Member of the General Motors Family




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                                                 What We Do
  A Global Provider of Capital and Liquidity Solutions
  Residential Mortgage Finance
  We originate, purchase, service and securitize a full range of
  residential mortgage loan products to make affordable capital
  available in support of homeownership

  Business-to-Business Lending
  We provide a wide range of liquidity solutions including construction
  loans, subordinated debt-type financing, receivables financing and
  term loans to residential developers/builders, timeshare resort
  developers and healthcare enterprises


  We are committed to expanding the availability of capital in key real estate finance markets worldwide.



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                           A Values-Based Company




    We have a strong, vibrant culture focused on people and markets.


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                                    Our Business Model




      We move capital between businesses and investors in select markets worldwide.


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                                  Our Business Strategy




    Our strategy is to diversify our business and grow organically.


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                                           A Market Leader




We have a strong business-to-business brand presence in U.S. and international markets.


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           Mexico Market




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       Credit to individuals Segmentation

                   Annual activity by individual credits segment
                                         (Billion dollars)                                $ 17.9          CAGR
                                                                                 $ 17.4
                                                                                                   (2003-2007)
                                                             $ 14.2                1.4     1.3
                                     $ 11.7                           1.0          2.1     2.0          27%
Residential Plus
                   $ 10.1                        0.6
                                                                      1.5          3.4     3.4
                             0.2                  1.0          2.7
 Residential         2.0     0.4       2.7
   Medium                                                                          7.9     8.6
                                                               7.0                                       11%
                     5.7               5.9
  Economic
     Social          1.7               1.5                     2.0                 2.6     2.6

                    2003              2004                    2005                2006    2007

                                   Average credit amount in each segment
                                                         (pesos)
                                     Residential Plus                       $1,800,000
                                     Residential                              $900,000
                                     Medium                                   $440,000
                                     Economic                                 $225,000
                                     Social                                   $155,000



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    Developers in the Mexican housing market

             Large developers in Mexico
                                                            Large developers in Mexico
                         (December 2003)

                                                                                     100%= 400,000 homes
   • Grupo GEO
                                                                              GEO
   • URBI                                                                      7%        URBI
                                                                                          5%
   • Consorcio ARA                                                                              ARA
                                                                                                4% SADASI
   • Grupo SADASI                                                                                  4%
                                                     Medium and Small                               3% HOMEX
   • HOMEX                                                  Developers                               2% PULTE
                                                                 67.2%
   • PULTE                     32.8% of the market                                                      BETA

   • BETA                                                                                             2% SARE
                               131,558 homes sold                                                    2% RUBA
   • SARE                                                                                          1%
                                                                                                      2% METTA
                                                                                                  1% HOGAR
   • RUBA                                                                                       DEMET

   • Grupo METTA
   • Consorcio HOGAR
   • DEMET




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    2005-2007 Business Plan
    Sofoles Credit Portfolio

   The total credit portfolios of the Sofoles has shown important growth, reaching US $7.6 billion in 2003

            Mortgage sofoles credit portfolio evolution                Market Share of the Mortgage Sofoles in the Total Credit
                                                                       Portfolio

   BillIions of USD                                       CAGR                                            100%= US$ 7.6 billions

                                              $7.6        37.8%
                                                                                         Hipotecaria
                                  $6.3                                                   su Casita                            édito
                                                                                                                 Hipotecaria Cr
                                                                                                                 y Casa
                                                                                            19%
                                                                  Hipotecaria
                      $4.3                                        Nacional                                      15%


      $2.9                                                               31%                                          7% Crédito
                                                                                                                         Inmobiliario
                                                                                                                    5%
                                                                                                               5%
                                                                                         2%             3%
                                                                                               3% 3% 3%                   Patrimonio

                                                                                                                     General
     2000          2001          2002          2003                   Rest      1%                                  Hipotecaria
                                                                                  1.1%     2.4% Terras              Hipotecaria
                                                                    GMAC
                                                                    Hipotecaria                  Hipotecaria        Comercial América
                                                                                     GMAC
                                                                                     Financiera            Ficansa
                                                                       Hipotecaria
                                                                       Vanguardia                          Hipotecaria
                                                                                          Hipotecaria
                                                                                          México


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       Market Trends

„ The Mexican mortgage industry has experienced an important growth rate in the past 5 years, mainly
  through the Sofoles

„ According to the governmental housing programs, the mortgage industry is expected to continue with
  high growth rates

„ Sociedad Hipotecaria Federal (“SHF”) is changing from being a direct lender to a provider of credit
  enhancements to Sofoles

„ To keep up with the growth it is important to develop alternative sources of funding for the industry

„ Sofoles and other industry participants are looking at the capital markets as an alternative source of
  funds



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 Investors/Capital Market
  „   Institutional Investors in Mexico:
       ‟    Mutual Funds:                     USD $32.2 billion.
       ‟    Afores (private pension funds):   USD $37.5 billion.
       ‟    Insurance Companies:                               USD $10.8 billion.
       ‟    Annuities:                                         USD $ 6.3 billion.
                                 Total                         USD $86.8 billion.

  „   The average maturity for corporate debt issues has recently increased from 5.7 years in 2002 to 6.2 years in
      2003
                                                  Investment Preferences

                       1‟5 years                                6‟9 years                     10-20 years


                     „Mutual Funds                    „Insurance Co.                „Insurance Co.
                     „Insurance Co.                   „Afores                       „Afores
                     „Afores                          „Private Funds                „Annuities
                     „Private Funds                   „Annuities



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    Mortgage Securitization

  „ GMAC-RFC + HSC

  „ First security for USD $50 million placed in December 2003   -   -Collateral of 2
      originators


  „ Second security for USD $ 100 million issued in July 2004
               -Collateral of 6 originators

  „ Investors: Mexican Institutional

  „ Recent Developments
     „ GMAC-RFC Mexican conduit
     „ Hipotecaria total

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                      Conclusion
   GMAC-RFC is becoming a global leader in real estate
    finance

   „ Leveraging skills from market to market

   „ Finding trusted local partners to interpret our business
     model

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   „ Taking selected risks to help transform international
                 2004 MBA Convention
           International Opportunities Panel


              Markus Bolder
           Head of Credit Treasury
               DG HYP AG

           Sponsored by The PMI Group, Inc.


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                               Agenda
  Overview of DG HYP

  Germany Primary Market Overview
    - Key Challenges and Opportunities
    - Borrowers, Mortgage Products and Product Development Considerations
    - Distribution Channels
    - Servicing Requirements and Issues

  Prospects for a Pan-European Mortgage Market

  International Expansion Rationale, Market Selection Criteria, Outlook




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                    Overview of DG HYP
              The Cooperative Banking Context
 Size and Quality of the                       Mission of DG HYP:
  Cooperative Banking Sector:                    Supplying German cooperative banks with:
   - 1,400 primary banks covering                     - Private housing loans
     30 million German citizens
                                        Brokerage     - Commercial mortgage loans
   -   Retail customers                      of
                                        real estate   - Public sector financing
       Small and mid-cap enterprises      loans
                                                      - Services based around core products /
   -   Broadly based distribution network and
                                        portfolios      portfolio management for real estate
       Placement power
       Direct client share
                                                               Key figures 2003:
                                                               Balance sheet:            69 bn EUR
                                                               1. Real estate lending: 25 bn EUR
                                                 CIR: 58%      2. Public sector lending: 37 bn EUR
                                                 ROE: 7%       3. Investements in MBS: 2 bn EUR
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                 Overview of DG HYP
Market Position / New Business Development
 DG HYP is one of the leading players in the German mortgage banking
 market:
  No. 1 in the cooperative sector
  No. 2 in the segment of medium-sized mortgage banks
  Among the five biggest players in the German mortgage lending market
   (incl. the two large mortgage banks HVB and Eurohypo)
 Strong growth rates in real estate lending and new MBS business over the last
 few years with …
   average gross margins increasing substantially, in 2003 from 80 BP (2002) to 92 BP
   slight decrease of loan to value for business in 2003
   improvement of diversification of the real estate related loan book
   … strengthens DG HYP‘s favourable market position with …
   growth potential in net interest income and
   improvement of the risk/return profile of the loan portfolio
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                           Overview of DG HYP
Market Position / New Business Development
 Total mortgage loan volume of medium-                          New Business in Real Estate
 sized mortgage banks at the end of the                         Lending and MBS Investments
 financial year 2002 (in Euro bn)                               (in Euro m)

                                                               5.000                                                    4,642
Hypo Real Estate
       DG HYP*                                                                                         3,946
    Aareal Bank                                                4.000
          AHBR                                                                          3,377
      Berlin Hyp
                                                               3.000   2,703
           MHB*
     Württ. Hypo
       Westhyp                                                 2.000
 Deutsche Hypo
      WL-Bank*
                                                               1.000
                   0   5   10   15   20   25   30    35   40

                                                                  0
Source: VDH (Association of German Mortgage Banks),
                                                                        2000            2001            2002            2003
companies‘ Annual Reports * Member of the cooperative sector
                                                                       Retail Clients   Commercial Clients     MBS investments


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                 Overview of DG HYP
                    Strategies and Structures
                                      Segments
                       Retail           Commercial           Capital
                                         Customers           Market
 •   Centre of competence in the field of mortgage and public sector lending for
     cooperative banks
 •   Retail: product development, portfolio management and funding
 •   Commercial customers: providing know-how and access to syndicated
     transactions for local banks; selective direct market approach abroad
 •   Pioneer with high expertise in loan portfolio management through multi-seller
     securitisation and MBS investments
 •   Development of an innovative standardised securitisation infrastructure platform
 •   Strong brand name in the Pfandbrief market
 •   Foundation of a Special Servicer for Non Performing Loans
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Germany Primary Market Overview
           Key Challenges – Market in Change

Growth limits                                 New legal framework

Customer demands                              Limited earnings from
                                              market risk management
Decreasing margins                           Demand for securitisations
Increasing costs
                                              Funding advantages


                      Focus on standardisation and distribution

Change in market      Economies of scale

                      Advanced business models

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 Germany Primary Market Overview
            Mortgage Products
Portfolio Management/Product Development
 Target                  Bank Portfolio     Securitisation         Investors
 Clients             Volume                              Mortgage Backed Securities
            Rating




                                                               AAA A
                                                         Covered Bonds (Pfandbrief)



                        AAA AA A BBB                           AAA AA A
                        Available for Mortgage Backed Securities
                        Collateral Pool for Covered Bonds
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   Germany Primary Market Overview
                       Distribution Channels
Residential loans outstanding (total approx. 1.1 bn EUR)
Market shares Germany 2003 by banking sectors in bn EUR
Banking Sector                    bn EUR       %
Saving Banks                          296    27,3
Mortgage Banks                        229    21,2        Cooperative Sector
Cooperative Sector                    170    15,7            including
Building Societies                    107     9,9       Cooperative Mortgage
Regional Banks                        103     9,6             Banks:
Public Sector                          84     7,8               21%
Big Branch Banks (without HVB)         56     5,2
Specialized Credit Institutions        37     3,4



Source: Deutsche Bundesbank, VDH (Association of German Mortgage Banks)
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   Germany Primary Market Overview
                     Distribution Channels
Non-residential loans outstanding (total approx. 257 bn EUR)
Market shares Germany 2003 by banking sectors in bn EUR

Banking Sector                  bn EUR          %
Mortgage Banks                       99       38,4       Cooperative Sector
Saving Banks                         55       21,4           including
Cooperative Sector                   46       17,7      Cooperative Mortgage
Public Sector Banks                  36       14,1             Banks:
Big Branch Banks (without HVB)       12        4,7              22%
Regional Banks                        9        3,5
Specialized Credit Institutions       1        0,2

  Source: Deutsche Bundesbank, VDH (Association of German Mortgage Banks)

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  Germany Primary Market Overview
             Benefits for Local Cooperative Banks
 Retail Customers:
  - ‘Combined support’ for cooperative banks in sales and marketing via sales
     force of a home loan and savings association (BSH, No. 1 in Germany)
  - ‘One-stop shopping’ for real estate financing customers based on a standardised
     product portfolio, where the products fit to each other
  - Consulting and processing support with a uniform and efficient software
     Increased income through higher market penetration


 Commercial Customers:
  - Access to ‘big ticket business’ in alliance with DG HYP
  - Loan syndications of DG HYP together with cooperative banks leads to new
    business potential and active management of the loan book
  - Know-how transfer from DG HYP regional real property financing offices


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  Germany Primary Market Overview
             Benefits for Local Cooperative Banks
 Capital Markets:
 - Reducing ‘concentration risks’ by risk transfer / securitisation
 - Introducing new income opportunities by usage of secondary loan market
 - Increase of flexibility due to richer refinancing possibilities
 - Improvement of risk / return profile
 - Capital relief due to securitisation

 Processing:
 - Industrial production (advantages through outsourcing regarding time and price)
 - Using a processing norm with system advantages e.g. via scoring when checking
   creditworthiness
 - Economies of scale due to increased processing quantities
 - Relieving the local back offices in order to be able to concentrate on
   sophisticated processing and on sales


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Germany Primary Market Overview
      Distribution Channels within
 the Cooperative Sector (Business Model)
    Example: Opening up of market share for cooperative banks association

  Cash                         Client
resources                                             Loan
                 Advisory
                                                Portfolio




                                     Rating
                                              composition
             Brokerage of Loans
 Cooporate                                         &                  Capital
  Banks                                          Loan-    Funding     market
              Loan Portfolios                 processing

Sale of MBS          Special Purpose Vehicle
                       MBS - Tranche A
                       MBS - Tranche B
                       MBS - Tranche C         Transfer risks of assets into MBS

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  Germany Primary Market Overview
  European ABS Market by Assets 2003/2004
  2003         Con.                                      2004 (as of 06/2004)
              Loans   Credit
                      Cards                                   WBS        Credit
               4%                 Lease                                            Lease
                       4%                                     4%         Cards
                                   2%                                     5%        3%
                                 CDO
                                                                                   CDO
                                 11%
                                                                                    9%
                                  CMBS            RMBS
                                   5%              55%                            CMBS
RMBS
                                                                                   6%
 56%
                               Other
                               16%                                                Other
                                                                                  17%
                      Auto                                            Auto
                      2%                  Source: HSBC                2%


   Volume: 224 bn USD (funded)                       Volume: 163 bn USD (funded)
            MBS-Volume: 61%                                MBS-Volume: 61%
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Germany Primary Market Overview
           Servicing Requirements and Issues
  Outsourcing:      - DG HYP  VR kreditwerk (retail servicer): 07/2000
                     - Mortgage Servicing Standards

  Drivers:          - Economics             Cost Efficiency
                     - center of competence  Factory Process,
                                              Value-Added Chain
                     - Rating                Advantages needed (Basle II)

  Developments: - Separation of
                               a) Special Servicer
                               b) MBS-Administration
                               c) Production Chain:
                                  Originator / Underwriter / Servicer
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       Prospects for a Pan-European
            Mortgage Market
 Production Chain
 Current setting:
  - Different jurisdictions
    - Property valuation
    - Non Performing Loans work out/Enforcement
                                                       ALIGNMENT
    - Securitisation regime (Synthetic vs.True Sale)

 But:
  - Process Standardisation
  - Transparency (regulatory and investor driven)
  - Harmonisation of funding and risk hedging

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             Prospects for a Pan-European
                  Mortgage Market
                          Cross border mortgage loans outstanding (as of 12/2003)
                          Total 39.4 bn EUR
      Others
Sw itzerland
   Hungary
Czech. Rep.
      Poland
    Norw ay                                                                     Focus of DG HYP:
        Spain
                                  *                                             Diversification
   Sw eden
    Portugal
                          *                                                     outside of Germany
     Austria
            US
                      *
Netherlands
 Luxembour
                                          *
          Italy
      Ireland                                                                 * Country with DG HYP
            UK
                                                            *                   representative office
     France                           *
     Finland
   Denmark
                                                                                     2004/2005
     Belgium
                  0   2       4       6       8   10   12       14   Bn EUR

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International Expansion Rationale,
    Market Selection, Outlook
  Cross Border Strategy:
    Conservative approach
    Strong credit culture with low loss history
    Diversification
    Portfolio transactions
    Appropriate market size / established market mechanism
    Cooperation with international partners
      - Equity needs for existing lenders
      - whole loan portfolio transactions
    Improve margins and returns on capital
       efficient risk transfer (e.g. sell First Loss Pieces to Investors)



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                  Ladies and Gentlemen,
           Thank you very much for your attention!

 Markus Bolder
 Head of Credit Treasury
 Deutsche Genossenschafts-Hypothekenbank AG
 Rosenstraße 2    20095 Hamburg    Germany

 Phone: # 49 (40) 33 34 – 36 14
 Fax: # 49 (40) 33 34 11 71
 Email: markus.bolder@dghyp.de
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DOCUMENT INFO
Description: Equity Residentia; document sample