We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is a Master Servicer?

Mary McMahon
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A master servicer is a financial entity responsible for managing the loans pooled in a commercial mortgage-backed security (CMBS). Typically the process of creating a CMBS involves transferring loans from the primary servicer who originated the loan to a master servicer. Borrowers will interact with the servicer throughout the life of their loans, unless they default, in which case the master servicer will transfer their loans to a different department for collection action.

Master servicers have a number of responsibilities. The first is maintenance of accurate and complete records on all the loans. This includes updated contact information for borrowers, loan amounts, interest, and a history on each borrower's repayment behavior. This information is necessary to administer the pool of loans, and it also becomes important in the generation of reports on pool performance, another task for the master servicer.

Accurate records are a very important part of the responsibilities at a master servicer. Regulators can ask to inspect records to see if they are current and to check for any signs of fraud or other issues. Investors also have a right to see records and to request periodic reports. Borrowers can contact the servicer to request proof of ownership and other documentation, and this can become an issue if a dispute over a mortgage goes to court. If the servicer loses the document assigning the debt to it, for example, the borrower may be able to argue that demands for payment are not legal.

This entity is also responsible for communications with borrowers. Borrowers submit payments to it and can contact the master servicer for questions about repayment, requests for forbearance plans, and other issues. This contact includes mailing disclosure statements so borrowers are familiar with their rights and responsibilities under the loan agreement. In the event a borrower goes into default, the master servicer initiates warnings and has the power to transfer nonperforming loans to a special servicer who focuses solely on such loans to bring them into compliance.

Numerous financial institutions act as master servicers and provide services to a range of investors and financial institutions. The staff includes administrators, accountants, and representatives who can interact directly with borrowers if they have concerns. Financial institutions and investors in search of a master servicer can compare rates and benefits between companies that offer this service to determine which would be most suitable for their needs. It can be advisable to request quotes from several places to find out more about the going rates in the industry.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments

Mary McMahon

Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.