Fitch Spotlights Small-Balance Loan Servicers

Small-balance commercial loans have become an attractive securitization product, and as they become more prominent, so will the servicers of such loans, according to Fitch Ratings.Originators are increasingly viewing small-balance commercial loans (with balances up to $3 million) as a way to increase market share and offer a full menu of products, the rating agency reported. "Servicing these loans typically requires greater customer service interaction with borrowers than is necessary with traditional commercial loan servicing," said Fitch senior director Mary Kelsch. She said many properties securing such loans are owner-occupied or owner-operated businesses, so analyzing property inspection reports, monitoring payment histories, and evaluating credit scores are often as important as analyzing property operating statements, if not more so. Fitch said it now has two new rating categories for small-balance commercial servicers: Small Balance Commercial Primary Servicer and Small Balance Commercial Special Servicer. The rating agency can be found online at http://www.fitchratings.com.