Commercial Real Estate Loan Administration

Article excerpt

Commercial mortgage servicing has become an extremely complex business and requires the expertise of true professionals versed in practically every discipline associated with the real estate finance industry. My thanks to the Mortgage Bankers Association of America's Commercial Mortgage and Asset Administration Committee for the revised edition of the Commercial Real Estate Loan Administration book. Once you've read it, I think you will agree with me.

As a 20-year veteran of real estate finance, I found myself absorbed in the complex world of commercial real estate loan administration when I read this book. The text is so well documented that it serves as a solid reference tool for the veteran real estate finance professional, but it also can be easily understood by novices to the business. Both managerial and technical topics are covered, including the role of the servicer within the corporate entity, personnel requirements, servicing procedures and training, and documentation and knowledge of loan provisions.

I found the chapter on "Commercial Mortgage Servicing Technology" quite interesting given that we live in an age of information. To the relatively unsophisticated layman, the book describes factors to consider when selecting both hardware and software, and includes tips on selecting a software vendor.

Another key chapter, "Servicing) Correspondent Agreements," covers the legal and contractual terms between the investor and correspondent and includes a model form to be used in negotiating the agreement. The chapter on "Methods of Financing Commercial Properties" discusses various debt and equity instruments such as participations, kickers, joint ventures, CMOs and IRBs.

"Closing the Loan and Establishing the Mortgage Account" is conceivably one of the more important chapters in this book. …