Roundup: Fitch Says CMBS Servicers 'Raising the Bar'

Fitch Ratings, citing results of its annual commercial mortgage servicer review process, sees positive trends developing in the servicing of loans for commercial mortgage-backed securities.

"Dedicated surveillance teams and enhanced technology that has improved day-to-day work flow have dramatically increased servicer responsiveness to issues and improved operational efficiency," said Stephanie Petosa, a senior director at Fitch, in a company report.

"Additionally, the advent of 24-hour borrower websites and borrower surveys has contributed to borrower satisfaction. Incre-asingly interactive investor websites that allow for customized portfolios and reports have also emerged as a best practice for the sector."

On the CMBS special servicer front, another favorable "best practice" that has emerged involves resolving long-term delinquent ass-ets and reducing the total number of CMBS assets in special servicing.

The tools developed by highly-rated special servicers to monitor the aging of special serviced assets have proven to be very effective as the level of investor interest in asset resolutions is rising.

While outsourcing remains a widely accepted and important practice in commercial mortgage servicing, Fitch said that not all CMBS master and primary servicers are exercising the best practices with regard to control and transparency in outsourcing practices.

"Despite improvements made in some outsourcing functions, Fitch would like to see CMBS master and primary servicers retain a staff that has the core competencies of the outsourced function," Ms. Petosa said.

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