Commercial Mortgage Backed Securities - Still Broken
Losses from maturing legacy-era CMBS were surprisingly low. Favorable markets, low interest rates, innovative loan structures, and lender competition are often cited as reasons, albeit by the same parties that brought us the 2008 financial crisis. But those losses may not have been dodged yet.
Unbeknownst to most CMBS borrowers, misreporting in their loan’s refinancing, sales, and servicing is pervasive at astounding levels. During the loan term servicers then often selectively report, or misreport crucial data and facts so as to mislead bondholders.
The entire onus of a default or for bad collateral performance is then placed with the borrower, despite clear lender culpability. The borrower in turn lacks standing in the loan sale, and are powerless to defend themselves. And generally borrowers don’t have the securitization expertise around complicated servicing and sale protocol spanning 1000’s of pages.
We’re unique because we understand and use the complex CMBS loan and trust protocol on borrowers behalf, while providing returns to investors who are also damaged.
Smaller and mid tier CMBS borrowers need to be extremely cautious to avoid losing assets and equity, and must proactively identify and manage their potential liabilities through this credit cycle, especially before losing statutory protections.
We support you strategically as necessary, in direct negotiations or from the background; or can as an insurance policy if negotiations don’t proceed as planned with potentially adversarial servicers or lender representatives;
Borrowers and their advisors gain a full picture of potential lender culpability in underperformance and defaults;
Full knowledge and more resources means quicker results at lower costs - turn months of waiting for important responses to weeks or days;
Ensure non-recourse CMBS debt doesn’t unexpectedly spring full-recourse, and better protect your business and reputations.
Our unique market position enables us to ‘short circuit’ misinformation and to protect CMBS investors and borrowers from being damaged by it. We treat borrower and investor information as confidential and use it with large groups of similar loans and trusts; to create and maintain a level of anonymity and ‘safety in numbers’.
Call, email, or text for a free and confidential consultation.
Proactively protect your CMBS and Commercial Real Estate Investments
My (strategic) partners and I have managed many $ billions of institutional fixed income assets, especially CMBS. Our proprietary research and data is focused on fundamentals like cash flow, values, party incentives, and we actually look at data. We have cross specialties in CMBS trust management, loan origination, sales and servicing, and loan restructuring.
CMBS investors and their constituents - federal, state, and local pension plans, retirees, and middle class and workers savings - stand to lose billions from booked and real losses to their holdings, losses that are purposely created and hidden in the sale and servicing.
CMBS Investor Services
CMBS investors are unable to effectively identify or communicate with each other, or to take remedial actions despite fraud in plain sight. We use the same borrower, loan level information to make trades and claims related to material CMBS loan sale and servicing misrepresentations.
Earn returns that counter your long exposures to CMBS collateral performance and value (always over-represented). We focus on misreported, underperforming, and over-leveraged CMBS collateral;
All CMBS types covered, including conduit, single asset, privatizations and infrastructure deals; residential and commercial real estate, and large and small transactions;
Pool resources with other CMBS investors to take remedial actions prescribed for in securitization documents, again from within a more anonymous group to minimize headline risk.