Many mortgage brokers pretty much disappear after loan closing, moving on to the next closing. However, post-closing, CMBS conduit loans generally require more servicing documentation than other types of commercial loans on a quarterly basis. This data, mainly financial reporting, can overwhelm borrowers. In addition, the process to obtain funds from reserve accounts requires more documentation. Adding difficulty, if the borrower’s servicing documentation is not current, the servicer generally will not release funds from the reserve accounts. All this adds up to a high level of servicing frustration for smaller borrowers who are not prepared to submit servicing documentation in a timely and complete fashion.
Having studied and negotiated the loan documents on hundreds of CMBS conduit loans, ValueXpress is intimately familiar with all of the servicing requirements for a CMBS conduit loan. At closing, we extend the offer to all our borrowers to assist them in understanding and completing servicing documentation at no cost for as long as it takes them to understand and complete the quarterly reporting package and reserve draw documentation on their own.
“Part of the financial reporting package requires the borrower to prepare a debt-service calculation on a rolling 12-month basis within 30 days of quarter-end,” said Jim Brett, Senior Underwriter at ValueXpress. “Many borrowers do not know how to complete this calculation, so we will provide them with a model that performs the calculation. They can use that model each quarter for the life of the loan.”
“I had a client who could not navigate the paperwork to get a draw from his FF&E reserve account for a recent $50,000 restaurant renovation at his hotel. I helped the controller export a report from QuickBooks that, together with copies of the paid checks, enabled him to get the funds released,” said Michael D. Sneden, Executive Vice President at ValueXpress. “Now the borrower can use the same process over the life of the loan for future FF&E reimbursements.”