Demand for ‘special servicers’ is rising, and it has absolutely nothing to do with bankers’ alleged marital difficulties.
With an increasing number of loans going into default, the special servicers who try to maximize recoveries on non-performing loan and real estate assets, are suddenly hot property.
Unlike ‘master servicers’ who can only offer a short term loan extension, special servicers can modify or extend loans for up to a year at a time. A lot of special servicing involves debt renegotiation with individuals and is unlikely to appeal to anyone with an investment banking background, but senior special servicing roles – particularly in the corporate loans or commercial real estate markets – are a bit more interesting.
“People who were trading in these loans probably wouldn’t be able to make the move,” says one banker turned special servicer. “They won’t necessary have the negotiating experience. We’d be more interested in bankers who worked on renegotiating corporate deals in the early 1990s.”
Banks operate their own special servicing units, but they also outsource their special servicing needs to standalone providers like Hatfield Philips International, Capmark, HML and others. Matthew Grefsheim, a former Morgan Stanley executive director in charge of special servicing for Morgan Stanley’s European commercial and residential securitised and balance sheet loan portfolios moved to Hatfield Philips in November 2008.
Ian Moore, relationship manager at HML, which specialises in mortgage arrears, says they’re expanding but that demand for ex-investment bankers is likely to be limited. “You need a mortgage processing and collecting background. When a bank is taking possession of a house you also need to understand the losses that will be made and how that will impact funding lines – what does it mean for a mortgage to be one, six or nine months in arrears?”