In the past, who appointed the CMBS Special servicer? Why has that been a problem?
Both the servicer and special servicer of a CMBS deal are appointed at the time that the CMBS is constituted. They are appointed by the issuer .
Special Servicer handles default side of loan servicing.When a loan goes into default or is going into default a special Servicer may take over the servicing of the loan.
This is always the case in CMBS.Most local and regional banks however handle their own loan workouts or special servicing in house.
The key conflict arises because special servicers, who sell distressed mortgages ( on behalf of CMBS bondholders) prefer to liquidate at higher prices to maximize the et present value for bondholders
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