#MBACMST23: How Servicers Stay Ahead of Challenges

(l.-r.: Elizabeth Burnett, CCMS, Laura Smith, Dave Spearman, Jan Sternin, CMB)

CHICAGO–Commercial mortgage servicers must be able to adapt and pivot to face their daily challenges, servicing veterans noted at the MBA Commercial/Multifamily Finance Servicing and Technology Conference.

“We’re seeing a bit of everything,” said Jan Sternin, CMB, Senior Vice President, Managing Director with Berkadia, New York. “As we go through this cycle, we’re seeing some stuff that we haven’t seen before, and then we’re seeing a lot of things we have seen before, but maybe for different reasons. There have been a lot of extension requests, a lot of covenants and trigger-tripping and lock boxes, so there is a lot of additional work.”

Sternin noted many servicers have a diverse client base. “We have agency loans, fee-for-service loans, CMBS and a whole bunch of other stuff,” she said. “It’s funny because the origination clients look at us and say things are slow these days, but our servicing teams and our client relations managers will reply that they are busier than ever.”

Dave Spearman, Vice President & Managing Director with Lincoln Financial Group, Radnor, Pa., said his firm has reallocated some resources to asset management. “Some of this is a function of–no surprise–difficulty with the office sector, but we’re also looking at balloon maturities that are coming up over the next six, 12, 18 or 24 months and asking if they will need an extension,” he said. “We’ve shifted some resources to asset management side anticipating that borrowers will ask for extensions ranging from one month to one year.”

Laura Smith, Senior Managing Director and Head of Servicing with Newmark, New York, said servicers’ jobs are growing more complex, but noted this can be a good thing. “It gives people opportunities to move to different areas, maybe advance their careers,” she said. “It creates opportunities to move around and use more critical skills. At Newmark, we are definitely big on cross-training across asset management teams and across servicing teams so people can pitch in and help as there are peaks in volume in particular areas. Everyone really does work together; so I think this is a great opportunity for people to learn more.”

Sternin said mortgage servicing is a relationship business, “It always has been and it always will be,” she said. “Look at your mortgage bankers and your borrowers, and a lot of them are repeat borrowers, so you’ve got a relationship there. Most of our shops have client relations people that deal specifically with the producer and the borrower. You strive to develop these relationships. In our world, no surprise is a good surprise, so you want to have proactive communication. Given what we’re dealing with now, communication is priceless.”