Forum Spotlight: Servicers Forum

CRE Finance World, Winter 2013

Forum Spotlight: CREFC Servicers Forum Brian Hanson Managing Director CWCapital Asset Management LLC T active year for the Forum, dealing with various important The draft templates have been reviewed by the CREFC Specialspecially serviced asset, and would be submitted as part of thestandard CREFC Investor Reporting Package (IRP). The templateswould then be posted by the Trustees on their websites.he CREFC Servicers Forum continues in its efforts torepresent all of its constituents, which includes not onlyprimary/master/special servicers, but also trustees andthird-party service providers. This has been an especially initiatives and issues that required our attention and response. I Servicers Working Group, and have now been distributed to the am pleased to note that we had significant input from across the IRP Committee and CREFC Forums for final review and approval. membership, both in meetings at the January and June Conferences, The goal is that the templates are adopted and implemented on and also through issue-specific working groups. Significant time, a going forward basis by the end of 2012 or in early 2013. Initial energy and thought have been contributed by many people from feedback has been positive, especially from Investors, and we look various organizations, and we give our sincere thanks to everyone forward to carrying forward this momentum to bring this important for their efforts. next step to completion. At the top of the list of initiatives this year was transparency (of Concurrent with (and in conjunction with) the transparency initiative servicer actions) on CMBS deals, and it remained very topical were the efforts of the IRP Committee to produce an updated throughout the year. It was a frequent agenda item on conference version of the reporting package, incorporating the new templates panels and in meetings among industry participants. Almost all as discussed above, as well as making other important enhancements. constituents, from issuers to investors to servicers and service New fields have been recommended for addition, unnecessary providers, have a vested interest in this issue being resolved fields have been recommended for deletion, and certain best prudently and expeditiously. I am happy to report that real progress practices recommendations have been drafted regarding the has been made. To deal with this head-on, CREFC formed the reporting of loan modifications and management of the 1099 Transparency Working Group, comprised of volunteers from the reporting process. The Loan Modification best practices address Servicers Forum, the Investment Grade Bondholders Sub-Forum the timing, consistency and reporting challenges resulting from and Issuer’s Counsel. the increased disclosure in the Loan Modification Template now in use. The 1099 reporting best practices addresses the challenges The Working Group held regular conference calls during the servicers are facing with regard to preparation and distribution of Spring and Summer to outline the various issues surrounding this 1099 forms in the current economy, including a significant increase situation, and some of the natural conflicts between the various in the volume of tax information reporting by servicers with regard parties. For example, investors wanted to see as much information to Form 1099-A (Acquisition or Abandonment of Secured Property) as practical, and with servicers being wary of disclosing more and Form 1099-C (Cancellation of Debt). data, especially on specially serviced assets — not to mention the logistics of additional reporting that would be involved. The As time-consuming as all of the transparency and related IRP Working Group reached a consensus on what additional disclosure initiatives have been, the Servicers Forum also found time to work would be appropriate, and produced draft templates that will on other important issues. There has been an ongoing effort to provide important information on special servicing resolutions. simplify and standardize Article 3 of the PSA, with a goal of trying Three sample reports were produced: a revised Loan Modification to achieve consistency across CMBS deals on expected servicer Template; a new REO Liquidation Template; and a new Loan duties and performance, and to reduce redundancies and risk caused Liquidation Template. It was proposed that these reports would by inconsistent documents. In the PSA Simplification Project, as it be populated by special servicers following the disposition of a became to be known, master servicers worked with issuers counsel CRE Finance World Winter 2013 66


CRE Finance World, Winter 2013
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