CMBS Special Servicers Lacking On Data, Fitch Says

Many special servicers of commercial mortgage-backed securities (CMBS) are not reporting current financial data on loans that have returned to performing status, Fitch Ratings says in its weekly U.S. CMBS Market Trends newsletter. The rating agency says the lack of transparency leaves investors in a bind as it relates to monitoring property performance.

‘Fitch Ratings believes special servicers should make an effort to collect operating statements on specially serviced loans as per loan documents and include the statements in business plans," says Adam Fox, senior director.

More than half of the loans in special servicing classified as current on debt service payments have not reported year-end 2010 data, the rating agency says, adding that distressed-asset operating statements are important to rating agencies' and investors' analyses.

This is not the first instance of peculiar reporting by CMBS special servicers. In recent months, several rating agencies revised their CMBS delinquency reports, citing corrections to data previously misreported by special servicers.


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