Commercial Real Estate Direct Staff Report

Wells Fargo Bank remains the most active servicer of commercial mortgages, according to a survey by the Mortgage Bankers Association.

The bank, whose servicing volumes ballooned as a result of its acquisition of Wachovia Bank last year, has a primary and master servicing portfolio of 41,834 loans with a balance of $473.8 billion. That's almost 50 percent more than the second-most active servicer, PNC Real Estate's Midland Loan Services, which has a portfolio totaling $323 billion.

But Wells' total volume represents a $121.6 billion decline from last year, when its portfolio totaled $182.6 billion and Wachovia's totaled $412.9 billion. Part of the decline could be explained by the runoff that occurs when loans are repaid. And with little happening in the securitized market, which served as the growth engine for Wachovia's servicing, Wells' portfolio shrunk.

But the MBA has warned that direct comparisons to previous periods might be distorted because of reporting nuances by individual servicers. Nonetheless, the MBA ranking, which is based on a survey, is the best available gauge of servicer activity.

Source: Mortgage Bankers Association

As has been the case for years, each of the top-five servicers generated much of their portfolios from the securitization markets. Wells is perhaps the best example. It handles $389.3 billion of CMBS loans, which amounts to 82 percent of its entire commercial mortgage servicing portfolio. Berkadia Commercial Mortgage's portfolio, as well, is comprised largely of CMBS loans.

PNC, on the other hand, relies on securitized loans for only 42 percent of its overall servicing work.

Source: Mortgage Bankers Association

PNC, meanwhile, continued to dominate servicers of loans written under various Fannie Mae and Freddie Mac programs. The company has long been among the most active lenders under Fannie's Delegated Underwriting and Servicing program.

Source: Mortgage Bankers Association

Gemsa Loan Services continued to dominate servicers of loans on behalf of life insurance companies, with a portfolio of 2,404 loans with a balance of $39.1 billion. It also topped a ranking of servicers of loans owned by credit companies, pension funds, REITs and investment funds. It handles 1,806 loans with a balance of $36.3 billion on behalf of those types of investors.

Source: Mortgage Bankers Association

LNR Partners Inc. again topped a ranking of named special servicers of securitized mortgages. It is named special servicer for 14,815 loans with a balance of $191.7 billion. CWCapital, meanwhile, was second with 12,687 loans totaling $162.6 billion and Centerline Servicing Inc. was third with 11,826 loans totaling $108.5 billion.

Comments? E-mail Orest Mandzy or call him at (215) 504-2860, Ext. 211.