SAN DIEGO-Understanding the guidelines and restrictions of special servicers goes a long way toward working with them in distressed-assets situations, Shlomo Chopp, managing member of Case Property Services, tells GlobeSt.com. Case is a real estate turnaround company specializing in restructuring distressed CMBS assets.
“The challenge is most people don't know how to deal with the special servicers,” says Chopp. “There's not some kind of magic or anything mystical about it. There are specific guidelines they're beholden to: tax laws, trust documents, and the special servicer is very restricted in what they can and cannot do.”
Special servicers also have no motivation to resolve a loan, which is why they can seem vague and not eager to resolve these matters, Chopp points out. “They will never have negative pushback on them if they don't resolve a loan. They are told to foreclose as an option, 'but if you feel you can work out the loan, then do so.' It's a very difficult situation, and savvy real estate investors can feel as if they're coming up against a brick wall.”
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
