TD 9463
TD 9463 expands the list of permitted exceptions under Section 1.860G-2(b)(3) to include (1) changes in collateral, guarantees, and credit enhancement and (2) clarifies when a release of a lien on real property securing a qualified mortgage does not disqualify the mortgage. Although these final regulations (TD 9463) resolve and clarify many issues for Modifications of commercial mortgages held by Real Estate Mortgage Investment Conduits (REMICs), the IRS and Treasury continue to study commentators' recommendations and solicit input concerning or comments on whether additional guidance may be appropriate on Modifications of Commercial Mortgage Loans Held by an Investment Trust (Notice 2009-79). Comments are due November 14, 2009.
Fitch MBS Conference
At the Fitch MBS Conference in NYC (9/15/09), it was reported that, special servicers are seeing select short extensions or discounted payoffs. Short extensions were defined as 1 year or less, only to allow time for the borrower to seek foreseeable financing. The servicers are considering whether the impairment is temporary or permanent. If it is financially impracticable, it is likely to go to liquidation. Borrowers who can pay but are not willing, are more likely sent to liquidation. Borrowers who are in trouble and able to cure the temporary impairment are likely to obtain some limited extension to obtain financing or face liquidation.
