The commercial real estate market is growing riskier. In cases where these loans are wrapped into commercial mortgage-backed securities, the servicing of the note itself is of tantamount importance. According to Fitch Ratings, Wells Fargo (WFC) is one servicer especially equipped to handle the challenge.
"Wells Fargo has addressed the increase in loan modifications by forming of a specialized loan modification team that was able to be more proactive in the workout process through increased communication and document review prior to a modification being executed," the report states. "Wells Fargo's team is staffed with highly experienced asset managers, attorneys, loan document experts, and loan administrators."
Fitch recently evaluated Wells CMBS servicing platform and notes the bank can handle large increases in modification volumes. The ratings agency also praises the ability of Wells to handle loans being returned from special servicing, citing numerous controls to handle such influx.
The Fitch outlook, however, is not totally rosy. "Fitch has observed delays in booking modified loans and the lack of information of loans' modified terms across CMBS," the report states. "This lack of information impacts the ability of investors to assess bond cash flows."