When a borrower is restructuring their loan, it can be like remodeling a house. Now imagine doing that in the midst of an earthquake. That is sort of how it feels in the CMBS industry right now to borrowers.
The special servicer is appointed by the controlling class certificate holder and as losses are passed through a pool, the controlling class certificate holder can and DOES change.
When the controlling class certificate holder changes so can the special servicer. We are actually seeing special servicers change in the midst of a restructure, which has the net effect of causing the restructure process to essentially ‘start over’.
Some special servicers prefer note sales and will do discounted pay offs, while some will not, so the special servicer really impacts the outcome of the restructure to a borrower.
Now couple all that in with the fact that the ownership of the special servicers themselves changes and you have what feels like a full blown earthquake!
Recent news indicates that LNR is in the process of changing hands and they have a large market share of special servicer assignments.
All I can really say is (1) buckle your seatbelt, (2) be prepared for a wild ride, and (3) have an advocate that you trust along with you! A CMBS restructure is anything but a smooth process!