Here we are, almost at the end of 2012, and that question is still lingering! That was a common question back in the early 2000’s. The rating agencies actually conducted a survey in the mid 2000’s to see how long it was taking to approve a CMBS assumption and what they found was that, on average, it was taking 120 days from the day the servicer got ALL the paperwork to the final approval (not closing of the deal, but just approvals). So, add another 30 – 60 days on for legal closing and you can see why it was taking 6 months or longer to close on a CMBS
assumption.
Ann Hambly created 1st Service Solutions in 2005 specifically to address this very issue. 1st Service Solutions served as the first expeditor for CMBS assumptions. And that is their core business still today.
So, you might wonder why you would still need an expeditor in today’s market. Haven’t the servicers and/or borrowers figured out how to get CMBS assumptions done in a more expeditious fashion by now without the help of an expeditor?
The answer may surprise you!
Picture a football field with players on it, but no quarterback. Throw a football out there and see how long it takes for that football to make it into the endzone, with no quarterback to call the plays. That is what an assumption is like without an expeditor! You might think the servicer is the expeditor, but they are just one player on the field. See, the real problem with CMBS assumption approvals is simply that there are many players on the field, all with important roles, but there is NO quarterback! And without a quarterback, it is unlikely that the ball will make it into the endzone on time!
AN EXPEDITOR SERVES AS THAT QUARTERBACK