EVOLUTION OF THE LOAN MODIFICATION

In the late 1990’s and early 2000’s, CMBS loan modifications and extensions were relatively straightforward. Early CMBS loans were originally underwritten based on in place cash flow and reasonable LTV’s and DSCR’s, loans typically transferred into special servicing either due to a maturity default or payment default. The reasons for the defaults were, again, fairly straightforward, loss of an anchor tenant in a shopping center or mall, loss of one or more big tenants in an office building, franchise issues with a hotel, or high vacancy in a multi-family property that was competing against relatively inexpensive housing.  read entire article…  Author:  Andrew Hundertmark.  Source:  CWCapital Asset Management.