Special Servicers and Defaulted CMBS Loans: Navigating Regulatory and Contractual Challenges

Restructuring or Foreclosing Distressed Assets to Maximize Recovery for Investors

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Wednesday, November 20, 2013

Recorded event now available

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Program Materials

This CLE webinar will guide counsel on the role of special servicers in resolving and maximizing the recovery of troubled CMBS assets. The panel will explain best practices during loan restructuring and foreclosure while ensuring compliance with REMIC regulations and other standards.

Description

While the state of CMBS defaults have somewhat improved in 2013, the CMBS market still faces challenges. Despite a decrease in defaults, the dollar volume of defaults is increasing. Moreover, as loans made prior to the financial crisis reach maturity (beginning 2015), defaults are likely to surge.

The amount of time for special servicers to resolve delinquent loans is also increasing due to the complexity of the problems. Special servicers must manage, resolve or dispose of defaulted loans in a manner that maximizes the net recovery for the benefit of the REMIC trust.

Counsel should prepare special servicers to clearly understand the specific challenges they face in their duties. Special servicers must cope with their responsibilities under pooling and servicing agreements and other rules that can challenge their goal of maximizing recovery.

Listen as our authoritative panel explains the challenges that special servicers face in the current market and outlines best practices for special servicers during loan restructuring and foreclosures. The panel will also provide an overview of servicing standards, REMIC regulations, and other rules that impact the potential value of a troubled CMBS asset that can be returned to investors.

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Outline

  1. Duties and responsibilities of the special servicer under pooling and servicing agreements
    1. Manage loan documentation
    2. Negotiate restructuring of mortgage loan and security documents
    3. Initiate foreclosure action and appoint receiver
    4. Enforce deficiency judgment
  2. Compliance with the servicing standard and any REMIC rules and restrictions
    1. Impact on flexibility to make significant modifications
    2. Remedies available on post-default
    3. Management and disposition of REO properties
  3. Best practices for counsel to special servicers in the current real estate market

Benefits

The panel will review these and other key questions:

  • What are the specific and complex rules that special servicers face when resolving defaulted CMBS loans?
  •  What areas do special servicers and their counsel need to be on the lookout for in CMBS loan documentation?
  •  What are some best practices for special servicers and their counsel with defaulted loans at stages of intake, demand, restructure, receivership and foreclosure?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Joseph E. Lubinski
Joseph E. Lubinski
Senior Associate
Ballard Spahr

Mr. Lubinski is a Senior Associate in the firm’s Real Estate Department. His multifaceted practice includes...  |  Read More

Patrick E. Mears
Patrick E. Mears
Partner
Barnes & Thornburg

Mr. Mears is Chair of the firm's Finance, Insolvency and Restructuring Department and Co-Chair of the...  |  Read More

Will S. Becker
Will S. Becker
Andrews Kurth

Mr. Becker focuses his practice on federal income tax matters, Texas margin tax and sales and use tax matters, with an...  |  Read More

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