As a means of tapping into an underserved market, CREMAC, a Brooklyn, N.Y.-based commercial mortgage company, has launched CAM Loan Servicing, a new separate specialty commercial mortgage servicing firm. CAM Loan Servicing is a specialty commercial loan servicer designed to service small to midsize commercial real estate mortgage loans with balances ranging from $50 thousand to $50 million.
CAM Loan Servicing's target clients are private equity firms interested in participating in the distressed commercial real estate mortgage and real estate sector, but lacking the infrastructure to support the acquisition and management of defaulted whole loans.
According to Joe Cafiero, president of CREMAC, CAM Loan Servicing was launched to service small to midsized commercial real estate loans, which he believes will be a sector that will need more attention in the ensuing months."We developed [this platform] for what we think is the next phase in the mortgage cycle," said Mr. Cafiero. "We think there's a lot of focus on the larger $100 million loans and that's the focus of other companies, but in the small-balance phase. We think our platform is timely."
CAM Loan Servicing offers two servicing options. In the first option, which is designed for clients interested in employing portfolio-specific servicing strategies, CAM Loan Servicing will design a client-specific team committed to achieving client-specific goals for a portfolio. The team will focus its efforts on that client and will act as an extension of the client's current infrastructure.
In the second option, designed for clients seeking high returns using CAM Loan Servicing's in-place asset managers, the firm offers cradle to grave servicing. Each asset manager will be assigned no more than 25 active defaulted assets, and have responsibility for those assets through resolution.
CAM Loan Servicing will also offer loan file due diligence to clients bidding whole loan pools in the secondary market. Its system provides a platform for bidders to produce a standard review output that can be incorporated into the clients pricing model. The system also allows the client to underwrite a large volume of loan files while maintaining the same integrity as a single file underwrite.
Mr. Cafiero explained that CREMAC launched CAM Loan Servicing after discovering that the sector was being underserved. "We were originally looking to invest in the sector and when we were looking for a servicer, there weren't many willing to take on a $25 million to $50 million portfolio," he said. "Most servicers lacked the capacity to take on new loans or take on smaller loans."
Since CREMAC has been in business since 1995, it had the infrastructure, so the company decided to create commercial servicing component.
According to Mr. Cafiero, CAM Loan Servicing is already seeing investors wanting to service small to midbalance commercial loans. "Most of the product is below $5 million. Considering the velocity of bank failures and increase in delinquencies, there's going to be an increase in flow."
The new company, which went live during the first week of September, is already actively servicing loans and doing due diligence for seven or eight private equity firms, according to Mr. Cafiero. "We're getting calls from private equity firms looking for servicing capacity, so we expect the portfolio to increase very quickly."
Its website, http://www.camloanservicing.com, is scheduled to be up and running by the end of this week.