Commercial Lenders Worried by Shortage Of Bids on CMBS Deals.

A concern that the servicing industry might be developing into an 'oligopoly' (with only a few major players) surfaced, at a panel session during the Commercial Mortgage Securities Association's annual convention.

Stacey Berger, executive vice president, Midland Loan Services said that the industry has "consolidated down so much" that on some deals there are only one or two bids.

"Only banks can manage the capital intensive aspect," he noted, adding, "don't make us invest, pay us a fee.

If we're not doing a good job, fire us."

The commercial mortgage-backed securities industry "is focused solely on economics, not on quality," according to him. This results in the sale of CMBS rights to the highest bidder, while the servicers who invest a lot get a fixed fee.

He noted, "Servicing advances are the facilitator for taking mortgages and creating liquidity. Servicers are asked to do things that put them in a situation where the ability to provide advances is in question."

And investors on the other hand want more and better information, he added.