Special Servicing Expertise is Key to Criimi Mae's Plan.(Brief Article)

Since emerging from Chapter 11 bankruptcy last year, Criimi Mae has taken some steps to strengthen the company's position.

The company has recently changed its strategy for its mortgage servicing subsidiary, Criimi Mae Services, deciding to increase its emphasis on loan management and special servicing, viewing the recent recessionary climate as favorable for this move.

In connection with this development, Criimi Mae intends to sell its remaining master and primary servicing CMBS contracts, transfer six employees to the special servicing department and "reduce overhead" by 34 employees.

Nine master servicing and primary servicing contracts, which cover CMBS having an unpaid balance of $2.1 billion are for sale.

This will leave Criimi Mae with master and primary servicing on an insured mortgage securities portfolio of approximately $176 million and primary servicing on mezzanine loans totaling approximately $7 million.

William Dockser, chairman, Criimi Mae, said, "A top priority for the company today is loan management and special servicing defaulted loans underlying our CMBS portfolio. Master and primary servicing are less important to our overall business and are not profitable operations based on present volume."

He added that the company's special servicing department "should be even stronger" after this action as Criimi increases its focus on "managing the risk of owning CMBS through loan surveillance and managing defaults."