Defeasance Consulting
Please visit www.TriMontDefeasance.com TriMont provides the coordination and industry contacts necessary to ensure an efficient and smooth loan defeasance process for our clients and their borrowers. Our professionals work closely with servicers, rating agencies, securities brokers, custodians, accountants and counsel to navigate this complex process. We have the flexibility to own and maintain the successor borrowing entity or simply consult. We enable the borrower to focus their efforts on the sale or refinance without worrying over how to get the collateral released from a long-term mortgage. The borrower responsibilities are minimal and generally include the following:
- Notify the loan servicer of borrower’s intent to defease the loan
- Sign an engagement letter with TriMont
- Sign various legal documents on the closing date
- Collect the net proceeds from the sale or refinance
- Contact loan servicer to obtain loan amortization schedule and pertinent documents
- Work with servicer’s counsel to ensure completion of all legal documentation for the defeasance
- If necessary, provide information and documents to rating agencies and/or special servicer to obtain their approval for the defeasance
- Obtain quotes and select dealer to provide the securities to be purchased as new collateral
- Work with successor borrower’s counsel to set up new entity to own the securities
- Engage independent director for successor borrower entity
- Engage accounting firm to review pool of securities for sufficiency to make all future debt service payments
- Set up securities account with custodian to hold securities and make debt service payments
- Financial reporting to loan servicer and/or trustee
- Maintenance of successor borrower entity including filing tax returns, annual filings with the State of Delaware and any other administrative filings necessary
- Annual payment of services to independent director
