IRP Article in Debtwire

A recent article published by Debtwire addresses the IRP 6 issue. It’s the first time I’ve seen anything about this in mainstream news; that’s a good sign that more people are starting to pay attention to this issue. Here is the article:

New CMSA IRP in flux; opposition from executives

by Sarika Gangar

A new version of the commercial real estate industry’s standardized reporting package has been delayed due to opposition from servicers and trustees, according to a servicer, a source familiar with the situation and a rating agency official.

The package, named the Investor Reporting Package, is produced by the Commercial Mortgage Securities Association and provides detail on bond, loan and property-level performance behind CMBS deals. Master servicers, special servicers and trustees use the IRP to report back to CMBS investors.

The CMSA is working with the Mortgage Bankers Association’s Mortgage Industry Standards Maintenance Organization on the current IRP, which is now hitting its sixth edition. The new version aims to move the reporting away from the current Excel-based model and into to an XML format, making it easier to view and transfer data files. The actual data housed in the IRP remains identical to the data within the current version.

Details behind IRP 6.0 were unveiled in January, with an ensuing comment period and a launch scheduled for June. That launch was delayed due to opposition from certain servicers and trustees, according to sources.

Master servicers and trustees are said to be wary of the conversion weighing down an already stressed system. “There is a lot of development costs and time that comes along with implementing this type of [rollout],” said one servicer. Special servicers are rumored to be against the conversion because it opens the door for additional data reporting, specifically in the form of full rent roll data. “Specials don’t want any information out there, because people could start second guessing them,” said a source familiar with situation.

Stacey Berger, executive VP of Midland Loan Services, stated that the firm is supportive of the conversion, adding that the firm has invested time, resources and intellectual property into the switch. “However, for this change to be beneficial, it must be universally implemented by both upstream deliverers and downstream recipients of the IRP,” he said, referring to servicers providing data and the group of trustees and data companies receiving the data. “Perpetuating two standards would not be prudent,” he added.

The CMSA has stated that the IRP conversion is on hold and a decision will be made by its 15-member executive committee, possibly as early as this month.

“We’re at a good point in the market to fix the [reporting] because issuers aren’t issuing much. It’s hard when new deals are coming to market, because nobody wants to change [the reporting] then,” said the rating agency executive.

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Jim Flaherty is CEO of and the creator of the Backshop loan origination system. He is a trained credit professional with experience installing enterprise underwriting systems for commercial real estate lenders, rating agencies and investors.

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