October 2013
Under the typical commercial mortgage-backed securities (“CMBS”) loan structure, a group of commercial loans are pooled into a real estate mortgage investment conduit (“REMIC”) trust and interests in the REMIC are sold to investors. Once a borrower’s loan is placed into a CMBS pool, the borrower becomes subject to a borrower-lender relationship that is often materially different than the traditional commercial loan structure. As billions of dollars CMBS loans that were originated during the last credit bubble are at or near maturity, modifying or restructuring loans on underwater properties are becoming more commonplace. In this Client Alert, we explore five frequently asked questions posed by borrowers and investors regarding restructuring CMBS loans…