Do you know what is being underwritten during a CMBS assumption? 

Let's start with what is NOT being underwritten:

  1. The loan amount – CMBS loans cannot be paid down
  2. The interest rate – those are set at origination of the loan
  3. The maturity date – set at origination 

The main objective of the underwriting is to ensure that the new borrower/sponsor/guarantor are equal to or better than the existing borrower/sponsor/guarantor. 

Who besides the servicer/underwriter can see the financial information for the new borrower/sponsor/guarantor?  Typically, only the new borrower, broker and lawyer. And, who besides the servicer/underwriter can see the financial information for the existing borrower/sponsor/guarantor? Only the existing borrower broker and lawyer. 

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