U.K. loan servicers have never been more under scrutiny, given the current state of the economy and with increasing numbers of loan defaults and limited options for refinance. Although some structured finance investors might believe the current situation for loan servicing is overwhelmingly negative, servicers themselves claim that the picture is mixed.

To address investors' increased interest in the role of servicers in this difficult market, Standard & Poor's Ratings Services recently hosted a conference featuring a servicer discussion panel. The event gave investors in CMBS and RMBS the opportunity to question servicers on the strategies they employ to manage securitized loan portfolios, including in critical functions such as collecting payments from borrowers and foreclosing properties when a borrower defaults.Depending on the effectiveness of such strategies, servicers can influence the number and severity of losses in the portfolio and hence the amount of cash the securitization vehicle can use to repay investors.

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