CC_S_201.2 Commercial/Multifamily Servicing Relationships

Although contracts define the rights and obligations of the various parties in a commercial/multifamily real estate transaction, the relationship among them is extremely complex. Servicers play a central role in the cycle, working with borrowers, lenders, investors, and others. Successful servicing requires successful management of the relationships among all of the parties. The number and type of relationships that servicers must manage for a given loan depend on the transaction type. For example, loans that are made part of a commercial mortgage-backed security (CMBS) transaction involve many more parties than loans that are held in a servicer's portfolio, loans that are purchased and held in portfolio by a government-sponsored enterprise, or loans guaranteed by Ginnie Mae.

Although the individual parties may vary for each deal, all deals have at least one borrower, one lender, one servicer, and one investor. In some transactions, a single party can fill several of these roles, and in some transactions, there can be more than one party fulfilling a single role. Successful servicing requires an understanding of the role(s) of each party and the subsequent implications for the servicing relationship. CMF Servicing Relationships examines the roles of the various parties in a commercial/multifamily real estate finance transaction. It reviews in turn the rights and obligations of the borrower, lender, investor, servicer, and other parties. The end of the course provides a description of how a single company can play multiple roles in a transaction.

This is a commercial/multifamily course.