A 2021 mortgage-backed bond deal got some worried attention in March of 2024 in the form of a $164 million holdback by special servicer Midland Loan Services. Now $105 million has been released, according to KBRA, which has withdrawn all its previous ratings "due to a lack of sufficient and ongoing information to maintain the ratings."
The backstory: Goldman Sachs Group put together a mortgage-backed bond deal in 2021. The money went to a group purchasing 61 multifamily properties with a total of 1,719 rent-controlled units in San Francisco. The floating-rate, interest-only, first lien mortgage loan had an initial balance of $674.8 million.
By the end of 2022, the borrowers defaulted. The loan was sold off at a deep discount. Then came the rest of the bad news. Special servicer Midland Loan Services told the investors of a holdback of $164 million.
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