top of page

What you need to know working with CMBS Servicers



WHAT SHOULD I EXPECT?


- Unlike your bank loan, don't expect the same response, CMBS loans are governed by other guidelines and agreements for the securitization.

- No government action for borrowers directly as of today.

- Communication is important.

WHAT IS THE SERVICER’S POSITION TODAY?*

- Limited Resources - task forces are set up to address the COVID - 19 event.

- Each Special Servicer is different and likely to have a different process and fee structure.

- They are flooded with the requests and multiple “asks.”

- Short term relief is available in the form of a consent (no modification to the terms of the loan documents)

  • Use of your FF&E reserves.

  • Strict guidelines on how it can be used and only for 90 days.

  • Likely not transferred to the Special Servicer but consent is granted from the Special Servicer.

- Long Term Relief (modification to the terms of the loan documents)

  • Transferred to the Special Servicer.

  • Loan modifications reviewed on a case-by-case basis.

  • Likely third parties ordered (appraisal, property inspection, environmental, etc.) plus other fees (default interest, late charges, workout/modification fees).

- Please note that PPP and SBA loans will likely require Servicer consent.

*The above information is only a summary and is not intended to be used to secure any type of consent or modification. Each individual case is different and Borrowers/Guarantors should consult with the appropriate legal, tax or loan specialist when seeking loan relief. WHAT ARE MY OPTIONS?

- You can work with the Master and Special Servicers directly but a clear understanding of the process is important to save you unnecessary costs and potentially negative actions. Requests should be communicated carefully - the implication that a default is imminent can trigger a transfer to Special Servicing.

- You can hire a consultant to process and negotiate on your behalf. Most consultants, can work directly with the Master and Special Servicer representatives to negotiate the business terms of a modification. The consultant will work collaboratively with your attorney to document the consent or modification agreements.

- You can hire an attorney to process and negotiate on your behalf. If you choose this route, attorneys have to speak through the Servicer´s attorney, who in turn, speaks to the Master and Special Servicer representatives. This will slow the process and drive up legal fees through the Special Servicer, as they will require you to pay their legal fees associated with your loan.

Tanya Hart Little is the founder and CEO of Hart Advisors Group, L.L.C., a real estate loan advisory company based in Dallas, Texas. Since Hart’s inception in 2009, Ms. Little and her team have completed more than $5 billion of commercial loan restructures, assumptions and recapitalizations. Drawing on over two decades of experience in real estate finance, Ms. Little has built Hart Advisors on a proven business platform focused on distressed real estate.

Comentarios


bottom of page