Who are all the additional parties involved in a defeasance and what do they do?
Due to the securitization process, multiple parties become involved in the defeasance process. In addition to the Borrower and their legal representative, the Borrower’s Counsel, it is common to see the following: • The Servicer is the party responsible for administering the trust (usually a REMIC) that holds the pool of loans and pays the bondholders. They will charge a defeasance processing fee, often paid as a deposit prior to starting the defeasance process. • The Servicer’s Counsel is the party that will examine the loan documentation and draft the core defeasance documents. • If the borrower has had past problems making loan payments, any previous defaults, or there are issues with the property that secures the loan, then the Special Servicer may also be involved. In some cases, the Pooling and Servicing Agreement will require that the Special Servicer review all defeasances for a given securitization. • The Defeasance Consultant advises their client on how to navigate the defeas
