The CMBS Borrower Experience Is Still Hell

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For years now, most participants in the CMBS industry recognize that the borrower experience isn’t what it needs to be if we are to have a thriving CMBS industry. Trade associations, committees and task forces have all tried to find ways to improve the borrower experience. As we are heading to the end of 2019, let’s take a look at the borrower experience in CMBS to see if it is improving or not. I will start out by giving a few examples of some of the most common issues in the industry on fully performing CMBS loans.

One of the most common borrower complaints in CMBS is the handling of cash management accounts for so many reasons. NOT that the loan is in cash management, but the actual handling of the accounts. One particular frustration is when there is a weekend in the middle of the whole process. Servicers typically reach into the cash management account to pull their payment on about the 5th of the month. When the 5th falls on a weekend, the servicer pulls their payment on the Friday BEFORE the weekend; often a day or two before the tenant pays its payment. Often, this results in the borrower being forced to pay the shortfall on that Friday for the payment, or the loan will be in default.