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Glossary

Mark-to-Market

Periodic adjustments of estimated value of an asset, or of future cash flows from an asset, to reflect current market levels. In a falling or weak market this is likely to create a downward adjustment of current value based on lower expected future income streams, such as if rental rates on existing leases are greater than rental rates being charged for new leases in the market (i.e., if there are several above-market leases in a building that are terminating). The opposite is true in a strong or rising market. This term may apply to the value of CMBS or any security subject to price movements.

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Glossary

Mark-to-Market Regulations

In December, 1996 the IRS released final regulations relating to the requirement that a securities dealer mark-to-market those securities that are being held for sale to customers. This mark-to-market requirement applies to all securities owned by a dealer, except to the extent that the dealer has specifically identified a security as held for investment. The mark-to-market regulations provide that, for purposes of this requirement, a REMIC Residual Certificate is not treated as a security and thus generally may not be marked to market.

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Glossary

Maturity Risk

See Balloon Risk.

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Glossary

Master Servicer

A firm responsible for servicing the mortgage loans collateralizing a CMBS transaction on behalf of the bondholders. A master servicer’s responsibilities vary according to the servicing agreement, and often include collecting mortgage payments and passing the funds to the trustee, advancing funds for any late payments to the trustee, providing loan performance reports to bondholders, and passing all loans to the special servicer that are non-performing or become REO. Also see Special Servicer.

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Glossary

Master Servicing Fee

The principal compensation paid to the master servicer, payable monthly on a loan-by-loan basis from interest on the loans. The base fee is computed on the principal amount for the same period and accrued at the applicable fee rate for a specific deal. In addition, the fee may include all assumption and modification fees, late payment charges and similar fees paid by borrowers on non-specially serviced loans.

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Glossary

Mezzanine Debt

A subordinate loan that is made to the parent of the mortgage loan borrower and secured by the parent’s equity ownership interest in the mortgage loan borrower, instead of by the mortgaged property itself. The term “mezzanine” implies indebtedness that is not debt of the mortgage loan borrower, is not secured directly by the property, but rather is situated above the mortgage loan borrower and secured by owner equity in the mortgage loan borrower. (Intercreditor Agreements spell out the rights of the various lenders).

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Glossary

Mezzanine Classes

Tranches in a securitization rated in the middle range of a multi-class security, i.e., more secure than the first-loss tranche but less secure than senior classes. According to CMBS market convention, mezzanine tranches typically refer to those rated between AA and BBB-.

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Glossary

Modeling (Cash Flow Modeling)

The chronological collation of cash flows from pools of loans, including balloon maturities that are securitized in a CMBS transaction, and their allocation among the various tranches in the transaction.

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Glossary

Mortgage

Debt instrument, secured by the collateral of specified real estate property that the borrower is obliged to pay back with a predetermined set of payments.

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Glossary

Multifamily Property

A building with five or more residential units or apartments. Multifamily properties are constructed in many forms which can include high rise, mid rise, low rise (urban without garden space), garden (urban with garden space), townhomes, student housing, cooperative housing, age restricted (marketed to a certain age with no other requirements), independent living and assisted living.

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CRE Finance Council Commercial Mortgage-Backed Securities (CMBS) Glossary

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Glossary

Mark-to-Market

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Glossary

Mark-to-Market Regulations

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Glossary

Maturity Risk

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Glossary

Master Servicer

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Glossary

Master Servicing Fee

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Glossary

Mezzanine Debt

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Glossary

Mezzanine Classes

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Glossary

Modeling (Cash Flow Modeling)

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Glossary

Mortgage

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Glossary

Multifamily Property

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