CRIIMI MAE Cuts Master and Primary Servicing to Focus on Special Servicing
ROCKVILLE, Md., Dec. 17 /PRNewswire/ -- Due in part to the current recession and an increase in specially serviced loans, CRIIMI MAE Inc. (NYSE: CMM - news) said it intends to increase its emphasis on loan management and special servicing within its mortgage servicing subsidiary, CRIIMI MAE Services Limited Partnership (CRIIMI MAE Services).
In connection with this strategy, CRIIMI MAE Services intends to sell its remaining master and primary servicing contracts related to commercial mortgage-backed securities (CMBS), transfer six employees to the special servicing department and reduce overhead by 34 employees, leaving a total of 71 employees in the servicing subsidiary.
CRIIMI MAE Services will seek to sell nine master servicing and primary servicing contracts, which cover CMBS having an unpaid principal balance of $2.1 billion. CRIIMI MAE Services will retain master and primary servicing on an insured mortgage securities portfolio of approximately $176 million and primary servicing on mezzanine loans totaling approximately $7 million.
``A top priority for the Company today is loan management and special servicing defaulted loans underlying our CMBS portfolio,'' said chairman William B. Dockser. ``Master and primary servicing are less important to our overall business and are not profitable operations based on present volume. As a result, we have decided to cut master and primary servicing now, and seek to sell the related servicing contracts.''
Mr. Dockser said, ``Our special servicing department should be even stronger after this action, as we increase our focus on managing the risk of owning CMBS through loan surveillance and managing defaults.''
CRIIMI MAE Services is named special servicer on $19.3 billion of commercial mortgage loans as of November 30, 2001. Specially serviced loans due to monetary default totaled $637 million at November 12, 2001. Of CRIIMI MAE Services' 71 employees, 22 are in the special servicing department. The balance of CRIIMI MAE Services' employees are primarily involved in loan management, including surveillance, financial analysis, site inspections, and borrower consents, modifications and assumptions. The parent company, CRIIMI MAE Inc., had no reductions in staffing and currently has 34 employees.
CRIIMI MAE Inc.'s assets totaled approximately $1.4 billion as of September 30, 2001, including approximately $1.2 billion of CMBS and insured mortgage securities, and $63.4 million of restricted and unrestricted cash (including amounts held by CRIIMI MAE Services). |
