Fitch Ratings focused on modification disclosure during its 2012 review of special and master servicers to address investors' need for information on how loan modifications impact investments, especially for the largest U.S. commercial mortgage-backed securitization loans.

While the rating agency observed improved disclosure of modification terms, financial reporting of the underlying properties has not followed suit. More than 50% of the loans it sampled did not have current or historical financial statements that were properly reported. 

These loans were discussed with management and Fitch also requested copies of business plans to assess if financial statements were obtained.

"In all instances Fitch found that special servicers had in fact collected current and historical financial statements and were documented in their business plans. This trend was observed among nearly all Fitch rated servicers. The only consistent difference observed was when the same servicer acted as both master and special servicer," the report said. 

In general, asset managers either neglected to forward the financial statements to the master servicer to be reported or statements were sent to a master servicer not responsible for analysis or reporting.

To read the full report, click here.