in News > Mortgage Servicing
print the content item


The steep reduction in the balance of U.S. commercial mortgage-backed securities (CMBS) loans in special servicing is encouraging, but this trend may intensify some of the conflicts of interest that impact special servicers, according to new research released by Fitch Ratings.

Fitch Ratings' data has determined that CMBS loans in special servicing dropped by almost $6 billion to $74.8 billion at the end of the third quarter. This balance peaked in 2010 at $91.7 billion. Over the past year, the average number of assets per asset manager has declined from 20 to 12.

However, Fitch Ratings warns that these trends may create more problems than solutions for the special servicers assigned to CMBS loans.

"The relative scarcity of specially serviced loans is increasing competition between servicers and may make the conflicts of interest that they must manage more important," says Fitch Ratings. "Investors are concerned that the special servicer agrees to resolution terms that are in their own best interest - or that of a related entity or brokerage - rather than protecting the interests of all bondholders. Increased competition for troubled assets, either for fee generation or ultimate control of the real estate, will further intensify investor concern as special servicers compete for controlling classholder rights.

"In our view," Fitch Ratings adds, "the trend toward a smaller specially serviced loan pool may be difficult to maintain over the longer run. The large volume of maturities that will begin in 2015 and run through late 2017 are difficult to predict amid uncertain interest rate trends and the current delicate recovery in the business cycle."


Six important questions you need to ask about your compliance process. Click to download the buyers guide._id1144


Latest Top Stories

Greenwich Estate Sells For Record $120 Million

Copper Beech Farm, a 51-acre property and mansion located on the waterfront in Greenwich, Conn., hit the market last spring with an asking price of $190 million.


AMCs Generally Receptive To Proposed 'Minimum Requirements' Rule

The rule would require all AMCs that operate in states that have supervisory programs to register in those states and to allow those states to have authority over their licensing.


Major Metros Showing 'Early Signs' Of A Housing Bubble

Among the 35 largest metros nationwide, more than half of homes currently listed for sale are considered unaffordable by historical standards, according to a recent report from Zillow.


Waters Introduces Yet Another Housing Finance Reform Bill

But unlike the other three bills now before Congress, Waters' proposal calls for replacing Fannie and Freddie with a cooperative of lenders that would be the sole issuer of mortgage-backed securities guaranteed by the government.


OIG: Property Preservation Companies Need Better Controls

A recent OIG audit revealed that there are numerous problems plaguing the property preservation business, not the least of which is the submission of false or erroneous property inspection reports on the part of sub-contractors.

LenderLive_id1164
Hse SandyHook
Play for Pink
Orb Mobile
SWBC_id1156
Superior Home_id1078
FedHomeLoan_id1130