CMBS defaults

What is a REMIC (Real Estate Mortgage Investment Conduit)?

What is a REMIC (Real Estate Mortgage Investment Conduit)?

A Real Estate Mortgage Investment Conduit, or REMIC, is an entity which is utilized to pool loans and issue mortgage backed securities (MBS), or commercial mortgage backed securities (CMBS). First authorized by the Tax Reform Act of 1986, REMICs can be organized in several different ways, including corporations, trusts, or partnerships.

What is a Special Servicer?

What is a Special Servicer?

CMBS loans are pooled together, securitized and sold to investors on the secondary market. Therefore, they are not generally serviced by the original lender. Instead, they are generally serviced by a master servicer, a third-party company that handles payments and communicating with borrowers. However, if a CMBS loan goes into default, servicing will generally be switched to a special servicer, which will work to determine if the borrower can once again become current on their loan.