Forum Spotlight: Servicers Forum

CRE Finance World, Winter 2014

Forum Spotlight: Servicers Forum he CREFC Servicers Forum, with over 600 members, is uniquely positioned due to its broad representation of so many segments of the CMBS industry to be a real force in shaping the direction in which CREFC moves on so many key issues currently facing the CMBS industry. The Forum is composed of primary, master and special servicers, as well as trustees and operating advisors and other similar third party service providers to the CMBS industry. The rating agencies also actively participate in Forum initiatives. Accordingly, there is a wide range of opinions and positions on key issues that must be discussed and analyzed before a Servicers Forum consensus can be reached. This year, I was very pleased and greatly encouraged by the wide range of interest, participation and cooperation the Servicers Forum demonstrated as we have engaged to discuss and address various significant pending industry issues. This collaborative effort was particularly evident at each of our January and June Conferences. On each of these occasions, attendance was large at the Servicers Forum and the discussion was spirited. This included discussion of the Transparency Initiative and the Revised Loan Modification Report, the New REO and the Loan Liquidation Report. At the CREFC January Conference there was a very active discussion of the RAC Application, which gave rise to the creation of a Working Group. The numerous meetings and discussions the Working Group held over the course of the year was successful in bringing consensus and resolution to this issue. The Transparency Working Group is a great example of the level of cooperation and collaboration that has been achieved through the on-going efforts of CREFC to build bridges between the various constituencies that comprise the CMBS industry. It also demonstrates the value of sitting down and sharing information and getting feedback. The Transparency Working Group included members of the Investment Grade Bondholders Sub-Forum and Issuer’s Counsel along with members of the Servicers Forum. This group will continue to monitor implementation of the three reports: the revised Loan Modification Template, the new REO Liquidation Template and the new Loan Modification Template to respond to any issues or questions that arise and to recommend any revisions that they believe may be necessary. Throughout 2013, work continued on two other major initiatives of the Servicers Forum: namely the CMBS Loan Watchlist Committee Initiative and the 17(g)(5) Initiative to Revise Servicer Best Practices. Also, a new Working Group was formed: the Rating Agency Servicer Review Report Standardization Working Group. CRE Finance World Winter 2014 86 Servicing Transfers continued to be a major issue during 2013. This issue not only poses challenges to the Servicers directly involved in these transfers but also to Trustees and a Rating Agencies. Since there is no reason to believe that this issue will either resolve itself or disappear in the near future, CREFC and the Servicers Forum decided to address this issue head on. A new Working a Group is in the process of being formed: the Special Servicer Transfers Best Practices Working Group. It is proposed that this Working Group will include representation from Special Servicers, Trustees and Rating Agencies, among others. Two other related issues were a major focus of the Servicers Forum in 2013. These two issues were the role of the Operating Advisor and Risk Retention. Much of the latter part of 2013 focused on the analysis and discussion of the re-proposed Risk Retention Rules mandated as part of Dodd-Frank and the preparation of a CREFC response that reflects the varying points of view on many of the key issues raised by risk retention that are held by the various constituencies within the CMBS industry. As an initial step, there were a series of conference calls open to the entire Servicers Forum in order to both inform members of the Forum regarding the re-proposed rule and to solicit feedback and comments in order to develop Servicer Forum positions on the major Risk Retention issues. The next stage consisted of meetings and discussions with the CREFC Policy Committee in order to come to consensus on the form of the CREFC final comment letter. Meetings with regulators to explain CREFC’s position on key elements of the Risk Retention Rule are on-going. Another important goal and a focus of the Servicers Forum during 2013 was the sponsorship of a series of After-Work Seminars to be hosted by the Servicers Forum. The Forum successfully hosted and sponsored three After-Work Seminars during 2013 in San Francisco, Dallas and Kansas City. The Servicers Forum is anticipating lively discussion and debate on a wide range of topics at the CREFC Annual Conference in Miami in January 2014. We look forward to seeing Forum members there and we welcome other interested parties. T Tom Nealon Vice Chairman and Director of Legal Affairs LNR Partners, LLC “The Transparency Working Group is a great example of the level of cooperation and collaboration that has been achieved through the on-going efforts of CREFC to build bridges between the various constituencies that comprise the CMBS industry.”


CRE Finance World, Winter 2014
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