Key Takeaways
- CMBS servicing: master servicer handles performing loans; special servicer handles distressed loans.
- Transfer to special servicing occurs at 60+ day delinquency, imminent default, or maturity default.
- All CMBS modifications must pass a net present value test comparing the workout to foreclosure recovery.
- CMBS workouts take 6-18 months; borrowers should engage counsel before the loan transfers.
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Test Your Knowledge
1.What is the role of a special servicer in CMBS?
2.What workout options exist for a CMBS borrower in distress?
3.Why are CMBS workouts more complex than portfolio loan workouts?