NY regulator mulls probe of CMBS loan servicers

Watch out CMBS loan servicers, NY regulator is eyeing you. The financial crisis was not about the RMBS loan servicers only. The commerical mortgage loans are in trouble too but that hadn’t been focused on to investigate.

New York state bank regulators are preparing an investigation into commercial real estate mortgage loan servicers whose related businesses may be in conflict with the bondholders that the loan companies are supposed to protect, a source with knowledge of the matter told IFR.

The same source said that Benjamin Lawsky, the superintendent of New York’s Department of Financial Services, will be leading the initial investigation.

“He is looking at these firms to identify if subsidiaries they have developed are profiting from loans they are servicing,” the source said.

But public information officer Matthew Anderson at the Department of Financial Services said that reports of an impending investigation are inaccurate and that Lawsky has not stated that he will look into the topic.

The top three servicers of defaulted CMBS loans, by far the most profitable part of the servicing sector, are CWCapital Asset Management, C-III Asset Management and LNR Partners.

Together they held almost 80% of the market for servicing defaulted CMBS loans at the end of 2013, according to Fitch Ratings.

Read on.

A flashback in 2010: U.S. Congressmen Paul Kanjorski and Ken Calvert urged then Treasury Secretary Tim Geithner and then Fed chief Ben Bernanke to restore stability to the commercial real estate sector and that the “deteriorating conditions in the commercial real
estate (CRE) market may threaten an economic recovery.” Here is the letter. Click here.


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