Governance Issues and Default Resolution in Commercial Mortgage Backed Securities
Author | : Jacob A. Darling |
Publisher | : |
Total Pages | : 120 |
Release | : 2004 |
ISBN-10 | : OCLC:58974543 |
ISBN-13 | : |
Rating | : 4/5 (43 Downloads) |
Book excerpt: With the increasing role of CMBS in commercial real estate lending, it has become crucial to understand the agency and governance risks that are created with the CMBS servicing structure. This study is an investigation of three key relationships within CMBS servicing, (1) between the servicers and different investor classes, (2) between the master servicer and the real estate owner/borrower, and (3) between the special servicer and the real estate owner/borrower. Through interviews with industry professionals and careful reading of the documentation that drives CMBS governance structures, the study reveals several different conflicts of interest that could significantly impact both the cash flow available to various trust investors and the underlying value of the real estate asset securing the mortgage.