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By CommLoan Admin,

What Ann says about CMBS borrowers, CMBS segment and maturity of the loan

CommLoan had the opportunity to catch up with Founder and CEO of 1st Service Solutions, Ann Hambly. After spending 30 years of her career in servicing for commercial real estate, it became very clear that help was needed to maneuver through the simplest of requests on CMBS loans due to the very structure of CMBS. She took her passion of helping and serving people and created the 1st borrower/owner advocate for CMBS loans; 1st Service Solutions.1st Service Solutions provides advice and solutions for anything ranging from the addition or removal of collateral on an existing CMBS loan, to the most complex loan restructure for all loan types, nationwide.

Q: What made you become interested in the CMBS segment?
Ann: In my role as CEO of servicing at Prudential I witnessed first-hand the issues borrowers had on CMBS loans. A “Prudential” borrower who had a life company loan, a Fannie Mae loan and a CMBS loan for example was usually very satisfied with the service he got on his life company loan while he was extremely frustrated with the “service” he got on his CMBS loan and the same servicing group was servicing both loans! The reason for that is the CMBS loans had to have multiple layers of additional approvals that Prudential wasn’t in control of (special servicer, CCR, etc.). I knew servicers themselves couldn’t solve this problem for borrowers so created a new niche in the market called “borrower advocate” where I stepped in and helped borrowers get approvals by representing them with ALL approval parties in a transaction.

Q: What were some of the greatest advantages when CMBS loans first became an option?
Ann: The greatest advantages to a borrower with a CMBS loan WERE (and still are) that the loan is non-recourse, it has higher leverage than they can get in most other lending scenarios, and with good terms.

Q: CMBS loans with notes coming due this year – problem or opportunity?
Ann: The CMBS maturity “wave” of $300 billion between 2015 and 2017 was predicted to be a disaster. 2015 was less of a problem than 2016 and 2016 was less of a problem than 2017 will end up being. Is this a problem or an opportunity? That depends on whether you are the borrower who was hit with the disaster or the “roofer” who now is super busy replacing roofs. These maturities create opportunities for creative capital placement.

Q: What would you recommend to those that are currently trying to refi their CMBS loans?
Ann: Don’t wait too long! Unless you are 100% sure you will be able to pay your loan off at or before maturity, talk to a borrower advocate to understand your options! Unlike a bank loan, that maturity date in a CMBS loan is NOT a suggested payoff date! In many cases, the borrower will incur a 5% late fee on the balloon payment by missing the maturity date by just a few days.

Q: Who should be contacting 1st Service Solutions and how?
Ann: Many CMBS borrowers think they have only two options when they run into trouble (including at maturity of the loan): – (1) pay everything owed, period, or (2) hand the keys back to the lender. In reality, there are many, many options in between those drastic scenarios. Any borrower who thinks they MAY run into trouble should call us so we can explain their options to them! It’s never too early to have that conversation either.

Contact 1st Service Solutions today!
1701 W. Northwest Hwy., Suite 100
Grapevine, TX 76051
Phone: (817) 756-7227
Fax: (817) 310-6688