Servicers of commercial mortgage-backed securities are facing challenges in the current less-than-liquid environment, according to Fitch Ratings. The rating agency said servicers now face more inquiries from investors. Other challenges include increased bidding competition for fewer securitizations and the need to add more staff, redeploy staff, or create specialized groups to deal with new concerns. In the case of special servicers, they will not be able to easily get rid of real-estate-owned assets because of decreased liquidity and may end up taking more losses, Fitch said. "Although there is still capital in the real estate market, the profile of the buyers has changed, and individual real estate investors are less likely to be able to purchase property because their financing options are limited," said Stephanie Petosa, a Fitch managing director. Institutional investors and opportunistic funds are likely to be more active. One positive fallout from this environment is that fewer loans are defeasing or prepaying, which is good for the stability of master servicers' portfolios, Fitch said. The rating agency can be found online at http://www.fitchratings.com.

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