The servicer clock
Your CMBS loan missed a payment. Here is what happens, and when.
A CMBS loan runs on a contract, the pooling and servicing agreement, and the contract runs on a calendar. Set the number of days since the payment or maturity you missed and see what has already been triggered, what comes next, and what it costs.
I missed a monthly payment: the sequence in BANK5 2025-5YR14
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Day 0
Payment due
The monthly payment is due. Your loan documents set any grace period.
Loan documents
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Day 30
Reported 30 days late
The next monthly filing to the SEC shows the loan as 30 to 59 days delinquent (payment status code 1). Anyone can read it.
Schedule AL, paymentStatusLoanCode
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Day 60
Transfer to the special servicer
A payment unpaid for 60 days is a Servicing Transfer Event. The loan moves from the master servicer to the special servicer, which works for the trust as a whole, and the special servicing fee starts.
PSA 1.01, "Servicing Transfer Event" (ii)
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Day 90
Reported 90+ days late
The filing now shows payment status code 3. Default interest and late charges under your loan documents keep accruing.
Schedule AL, paymentStatusLoanCode
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Day 120
Appraisal Reduction Event
At 120 days of uncured delinquency, the special servicer must order an appraisal within 60 days. If 90% of the new value, plus reserves, minus what is owed on top of principal, is less than the balance, the gap is the Appraisal Reduction Amount.
PSA 1.01, "Appraisal Reduction Event" (i), "Appraisal Reduction Amount"
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Day 180
Appraisal deadline
If no appraisal has arrived 60 days after the Appraisal Reduction Event, the reduction is set at 25% of the balance until one does. Interest advances to bondholders on your loan are cut in proportion.
PSA 1.01, "Appraisal Reduction Amount"; PSA 4.03(e)
I missed the balloon at maturity: the sequence in BANK5 2025-5YR14
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Day 0
Maturity: the balloon is due
If you have delivered a signed refinancing commitment or a signed sale contract that closes within 120 days, the loan can stay with the master servicer while it closes. Without one, the missed balloon is a Servicing Transfer Event at once.
PSA 1.01, "Servicing Transfer Event" (i)
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Day 1
Reported past maturity
The filing shows payment status code 4 (matured, still paying) or 5 (matured, not paying).
Schedule AL, paymentStatusLoanCode
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Day 90
Appraisal Reduction Event (day 120 if a deal is pending)
Ninety days after the missed balloon, an appraisal is triggered, unless a refinancing or sale is expected within 120 days of maturity, in which case it waits until day 120.
PSA 1.01, "Appraisal Reduction Event" (vi)
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Day 120
The 120-day line
If the loan went to the special servicer only for the missed balloon or a missed payment, and it is refinanced or repaid in full within 120 days of maturity, the special servicer takes no liquidation fee and no workout fee on it. After day 120 the refi or sale deadline is gone and the loan transfers if it has not already.
PSA 1.01, "Liquidation Fee" proviso (e); "Workout Fee Rate" (ii); "Servicing Transfer Event" (i)
Before day one
A loan can move before any payment is missed. If the servicer decides a payment or balloon default is likely in the foreseeable future and would last at least 60 days, that is a transfer event too. Before control shifts away from the subordinate bondholders, the Directing Certificateholder must agree. This deal has no trigger for a borrower simply asking to be transferred.
PSA 1.01, "Servicing Transfer Event" (iii)
The way back
A specially serviced loan goes back to the master servicer as a Corrected Loan after three consecutive on-time payments, counting any modification, if no new transfer event happened and none is foreseeable. The 1% workout fee then applies to every payment of principal and interest for as long as it stays corrected.
PSA 1.01, "Corrected Loan"; PSA 3.19(a); "Workout Fee Rate"
Source for every step: the Pooling and Servicing Agreement, dated as of April 1, 2025 for BANK5 2025-5YR14, filed with the SEC on April 2, 2025. Payment status codes are the SEC's Schedule AL codes. Your trust's agreement may use different day counts; check it before you rely on these.
What the special servicer is paid
In BANK5 2025-5YR14, the special servicer earns 0.25% a year on the balance, at least $3,500 a month, from the day the loan transfers. If the loan comes back as a Corrected Loan, it keeps 1% of every payment of principal and interest after that, with a $25,000 minimum. If the loan is paid off at a discount, sold or foreclosed, it takes 1% of the proceeds, or up to 3% to reach $25,000. Estimate the fees on your loan.
Those fees come out of the trust's collections. Whether your loan documents make you reimburse any of them, or the appraisal and legal costs, is a question for your loan agreement and your lawyer.
Questions people ask
Can I ask to be moved to the special servicer?
Not in the servicing agreement used here. It has no trigger for a borrower request. The servicer can transfer a loan before any payment is missed if it decides a default is likely and would last 60 days or more, and the subordinate bondholders' representative must agree to that while it still controls the deal.
Is every CMBS deal the same?
No. Conduit deals use similar language, but the day counts, fees and consent rights are set deal by deal. The clock uses BANK5 2025-5YR14 as the example because its agreement is recent and public. Your own trust's pooling and servicing agreement, filed with the SEC as an exhibit to an 8-K, is the one that applies.
How do I get back to the master servicer?
Make three consecutive payments on time, counting any modification, with no new default in sight. The loan then returns as a Corrected Loan. The special servicer keeps a 1% workout fee on every payment of principal and interest for as long as the loan stays corrected.
Who decides whether to modify or foreclose?
The special servicer recommends; the Directing Certificateholder, who represents the most junior bondholders, can block a major decision by objecting within ten business days. Major decisions include foreclosure, modifications, maturity extensions, discounted payoffs and assumptions.
Need a way out before the clock runs?
A new lender, a recapitalization or a sale can end a special servicing file. The Janover Capital desk can look at yours.