On March 20th, ValueXpress began providing advisory services to obtain loan payment deferrals for existing and new clients related to the effects of the COVID-19 outbreak. The response was remarkable and we are pleased to have processed relief requests for over 30 clients.
Master Servicers and Special Servicers have been swamped with over 5,000 requests for loan payment relief. However, ValueXpress developed an organized submission package consistent with the information needs required by servicers to approve requests. This has resulted in a 100% approval rate for “performing loan consents” and quicker approvals for its clients. Of ValueXpress clients, 90% are requesting Performing Loan Consents.
Approvals are falling into two buckets:
Performing Loan Consent. The relief request will be evaluated by the special servicer but will not require a formal transfer to special servicing, as long as the resulting relief structure does not include deferment of principal and interest or any other waiver or material modification of the loan. This option may provide temporary relief to the borrower through a number of alternatives, including utilization of existing reserve funds to fulfill debt-service obligations, deferment of certain monthly reserve payments and temporary suspension of cash management triggering events and covenant testing. This option results in significantly lower costs to the borrower but offers fewer relief alternatives.
Transfer to Special Servicing. The loan is formally transferred from the master servicer to the special servicer. This option offers the most comprehensive suite of potential relief alternatives but will result in substantially higher out-of-pocket expenses to the borrower. Once in special servicing, the borrower can expect to pay all servicing fees, special servicer legal fees, third-party report fees (appraisal, environmental and/or property condition assessments) and any other costs and expenses incurred by the special servicer.
If you are having difficulty obtaining approval for loan payment relief, please contact a member of the ValueXpress team: Mike Sneden (email@example.com – 212-883-6447), Dennis Suh (firstname.lastname@example.org – 212-883-6487) or Gary Unkel (email@example.com – 212-883-6475) to begin the Payment Deferral process immediately.