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Defeasance Transaction Team

Who makes up a Defeasance Transaction?

DefeaseIt will act as your independent defeasance consultant and simplify your transaction by facilitating and coordianating all parties involved in the defeasance process. We do this with saving and serving your transaction to meeting your closing schedule timely and economically. The following is a list and explanation of the parties involved in the defeasance transaction.

Accountant: an accounting firm which reviews the adequacy of the Securities to make payment on the loan.

Borrower's Counsel: the original borrower's legal counsel.

Buyer/New Lender: entity which through the borrower provides the funds to purchase the Securities to replace the lien and secure the loan.

Custodian/Securities Administrator: the bank which holds the Securities that are pledged for the loan that has been defeased.

Defeasance Consultant: DefeaseIt acts as the entity which coordinates all aspects of the defeasance transaction, on behalf of and as representative of the borrower.

Escrow Agent: records the release of the real property once the Securities have been purchased and subsequently transferred to the custodian.

Rating Agency: - your defeasance may require Standard & Poor's, Moody's and Fitches approval (technically a no-downgrade letter) if the size of the loan being defeased or the percentage of collateral it represents in the CMBS meet certain requirements. Typically though the involvement of the Rating Agencies is not require is so the process for obtaining this approval is part of the defeasance process and must be obtained prior to the closing.

Securities Advisor: the entity that is either retained by or affiliated with DefeaseIt which coordinates the purchase the Securities for the borrower.

Servicer: the Servicer of the CMBS which holds the loan. The Servicer represents the interests of the Lender, is a party to all the Defeasanace Documents, and in large part controls the process. The servicer is typically a large institution that interacts directly with the borrower pursuant to a pooling and servicing agreement to collect monthly mortgage payments, hold the borrowers' escrowed funds, request financial statements, renew UCC financing statements, respond to borrower requests and the like.

Successor Borrower: the successor borrower will, upon defeasance, replace the borrower by assuming the loan obligations. The successor operates solely to hold the Securities to repay the loan.

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