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Real Estate Financing: How to Document Securitized Commercial Real Estate Mortgage Loans

Ensuring uninterrupted cashflow is a key element of securitized mortgage documentation. A SECURITIZED MORTGAGE LOAN is a commercial real estate mortgage loan that is underwritten and documented to ensure that it will be marketable to investors in the commercial mortgage backed securities ("CMBS") market. Real estate securitization is an increasingly important aspect of real estate financing and investment, and thus, of real estate practice. To document a mortgage loan successfully for securitization, counsel must be thoroughly familiar with the requirements of the public markets and rating agencies and must be able to negotiate, draft, and assemble the necessary documentation effectively and efficiently. At the outset, note that the loan documentation standards for traditional mortgage loans and loans destined for securitization differ. In addition, there may be differences in documentation attributable to the nature of the assets that the mortgages will encumber and the identity of the borrower.

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