The MYSTERIES of the UNIVERSE by ProQuest


In 2007, the Commercial Mortgage Securities Association (CMSA), New York, and the Mortgage Bankers Association (MBA) created a joint task force to study the issue on why commercial mortgage-backed securities (CMBS) loan assumption process causes servicers and borrowers so many headaches. Among the reasons assumptions receive so much attention are: 1. the large number of assumptions processed annually, 2. the time and effort of multiple parties required to process an assumption, 3. the obligation to protect the interest of CMBS investors, and 4. the high level of borrower dissatisfaction with the assumption process. As with most commercial real estate transactions, an assumption begins with the borrower initiating the process by submitting an executed application to the servicer. The intent of this article is to demystify the CMBS assumption process by providing a better understanding of the roles of the parties, documentation requirements, the approval process and the challenges inherent to the assumption process.

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