The pace of commercial loan servicing is forever accelerating. To keep up, today’s commercial mortgage loan analyst must master a dizzying array of tasks, including verifying mortgage payments, monitoring escrow draw-down to the level of lien releases, analyzing periodic financial statements, reviewing property inspection reports, coordinating borrower requests, and so much more—all while providing the optimal customer service expected by NorthMarq’s lender and borrower customers. NorthMarq strives to meet this challenge by hiring top-tier applicants, supplying them with superior training, and immersing them in our “customer first” culture.
NorthMarq looks to our more experienced analysts to attain and employ a lender-specific expertise that enables the analyst to not only grasp the lender’s policies and procedures, but also to absorb and internalize the lender’s way of viewing the commercial mortgage loan world. These “ace analysts” add value to day-to-day transactions as well as to specific borrower requests or lender initiatives. They guide the borrower toward solutions that the lender will find workable and consistent with its investment strategy, dissuade the borrower from projects that the lender will reject, and sometimes even help the lender get comfortable with a borrower request that initially appeared unpromising.
The net effect of our analysts’ actions is to save two very important commodities for both our lenders and our borrowers: time and money. Here we share some of the stories from four of these ace analysts: Trang Dinh, Eric Werdahl, Jared Faidley, and Sara Janulewicz.
Trang Dinh: Expediting the Process with a Life Insurance Lender
For the past eight years, Trang has worked NorthMarq’s account with one of our life insurance company lenders. One of the loans Trang oversees has had several loan fundings, whereby the borrower receives additional loan proceeds needed to take the subject property through construction to stabilization. Each funding requires preparation by Trang of a “funding package” used by the lender to verify that all of the specified loan document conditions have been met in order for the borrower to qualify for the additional loan proceeds. Trang excels at anticipating the lender’s needs, ensuring that all the needed information is always in the funding package and making the lender’s review process as quick and easy as possible. But Trang’s expertise does not benefit only the lender. On one occasion Trang marshalled information for the lender concerning the property exceeding rent and square footage expectations, thereby permitting the lender to approve a funding in excess of the expected amount. Keeping the lender and the borrower informed and—insofar as it is possible—happy is the hallmark of Trang’s loan servicing.
Eric Werdahl: Finding Solutions to Unusual Requests on Securitized Loans
Eric, as the analyst assigned to securitized loans held by one of NorthMarq’s master servicers, has participated in several unusual requests from borrowers. One concerned a request to erect a stand-alone building in a shopping center’s parking lot to accommodate a nationally known donut company as an additional tenant. Eric directed the borrower to REMIC rules that generally prohibit such a project. When the borrower persisted, Eric advised the borrower of the master servicer’s expected concerns with the borrower’s ground lease proposal and eventually helped the borrower see the advantages to waiting the short time to maturity and then adding the tenant within the existing shopping center, a solution embraced by the borrower and one that spared the borrower and the lender an arduous approval process involving the special servicer.
Another of the master servicer’s loans had Eric working with a borrower seeking subordinate financing to fund roof repairs on a complex of 40 multifamily buildings. Such subordinate financing is normally out of the question for a CMBS loan, but Eric grasped the salient feature of the loan—its unusual 20-plus-year term—by the end of which the buildings would certainly need new roofs. Eric helped conceive a proposal that had the guarantor taking out an unsecured loan. The proposal won support of the master servicer and then received approval from the special servicer. Eric’s efforts resulted in a borrower delighted to find a funding source for the roof repair and a lender pleased to have its loan collateral significantly upgraded.
Jared Faidley: Providing Creative Guidance for Agency Loans
Jared has nine years of experience servicing loans of one of NorthMarq’s agency lenders, both portfolio and securitized loans. Jared recalls a portfolio loan that was undergoing a loan assumption. Problem was the borrower entity contained an equity partner who was in the middle of a §1031 exchange (which affords a tax break on proceeds from a commercial real estate sale, provided the proceeds are re-invested in commercial real estate within 180 days), but the borrower did not disclose the §1031 aspect of the transaction until after the lender approved the assumption! Jared came to the rescue, suggesting that the borrower consider restructuring the assumptor as a tenants-in-common (“TIC”) entity. Without the need to re-underwrite, the lender re-approved the transaction and closed it within 10 days, with Jared shepherding the deal to the finish line.
Jared points out that great customer service does not always guarantee a successful outcome to the transaction. He recalled the story of a long-time NorthMarq borrower trying to have his loan assumed by a cash-strapped buyer whose assets were tied up in Texas oilfields—just when the price of a barrel of oil dropped from $100 to $30. Jared tried everything to help the seller’s project survive eventual special servicer review: payment guarantees, funded reserves, and even the seller staying on as a guarantor. Ultimately, the project made it as far as the special servicer, who, despite the panoply of security measures, denied the project based on the buyer’s lack of liquidity and expected refinance difficulty. Although the project was not crowned with success, NorthMarq’s borrower was grateful for Jared’s efforts, and the CMBS entities appreciated having all the information they needed to make an informed decision.
Sara Janulewicz: Managing Expectations for Life Company Loans
Sara brings over 30 years of loan portfolio analyst experience, the past 14 with NorthMarq, during which she has built a solid relationship with another of our life insurance company lenders. One of Sara’s key skills is managing the expectations of both borrower and lender. During her career, Sara has witnessed several loans come to NorthMarq for servicing through acquisitions or portfolio purchases. On some of those occasions, Sara—ever vigilant about loan document requirements—gave her usual notice to borrowers about items like prepayment penalties, only to be met with disbelief and even scorn by some of the affected borrowers, who were not accustomed to enforcement of some loan document provisions by previous correspondents and/or lenders. Sara quickly acquired “street cred” with these borrowers when her warnings to them about likely consequences with the lender were realized. With respect to her life company lender’s loans, Sara knows all of the documentation that is required for loan events and is often commended by the lender for providing qualitative recommendations in a comprehensive, yet concise package. Although some borrowers protest about all of the documentation requested, in the long run it provides for a faster turnaround for the lender to respond and approve. Like the aforementioned borrowers, NorthMarq’s regional production offices doing loans for this lender have long since learned to heed Sara’s expert knowledge on what the lender will require on borrower requests.
NorthMarq is grateful to have these analysts on our staff, people who amass expert knowledge and put it to use every day to help our lenders and borrowers. Thank you, Trang, Eric, Jared, and Sara!