Fitch: U.S. CMBS Servicers Continue To Raise The Bar on Quality Servicing.

NEW YORK -- During the annual servicer review process, Fitch notes CMBS servicing best practices and provides feedback to the servicing community on how they might improve. A newly published paper presents a summary of the most current CMBS servicing trends, market trends and best practices Fitch has observed.

'Dedicated surveillance teams and enhanced technology that has improved day-to-day work flow have dramatically increased servicer responsiveness to issues and improved operational efficiency' said Stephanie Petosa, Senior Director, Fitch Ratings. 'Additionally, the advent of 24-hour borrower web sites and borrower surveys has contributed to borrower satisfaction. Increasingly interactive investor websites that allow for customized portfolios and reports has also emerged as a best practice for the sector.'

On the CMBS special servicer front, another favorable best practice has emerged as the most active servicers have focused on resolving long-term delinquent assets and reducing the total number of CMBS assets in special servicing. The tools developed by highly rated special servicers to monitor the aging of special serviced assets have proven to be very effective as the level of investor interest in asset resolutions is rising.

While outsourcing remains a widely accepted and important practice in the U.S. commercial mortgage servicing sector, not all CMBS master and primary servicers are making the best use of the two most important keys of successful outsourcing: control and transparency.

'Despite improvements made in some outsourcing functions, Fitch would like to see CMBS master and primary servicers retain a staff that has the core competencies of the outsourced function,' said Petosa. 'This core group is necessary for training and outsourcer oversight and to remain prepared in the event the outsourcing resource is terminated.'

Fitch will continue to inform and educate the market on the trends and challenges of CMBS servicing through refinements to its process, as well as in its annual review of 33 different CMBS servicers. By providing this constant and timely feedback Fitch is improving CMBS servicing practices across the whole servicing community. 'Trends and Best Practices in CMBS Servicing' is available on the Fitch Ratings web site at 'www.fitchratings.com'.