Structured Finance. Midland Loan Services. CMBS Servicer / U.S.A. Servicer Report. Servicer Summary. Key Rating Drivers

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1 Midland Loan Services Servicer Report CMBS Servicer / U.S.A. Ratings Commercial Master Servicer Commercial Primary Servicer Commercial Special Servicer CMS1 CPS1 CSS1 Servicer Summary Midland Loan Services (Midland, or the company) is the commercial mortgage servicing division of PNC Bank, N.A. (PNC). The company performs master and primary servicing for both legacy and recent vintage CMBS transactions, although the majority of its commercial loan primary servicing is non-cmbs servicing and subservicing for institutional clients, specialty finance companies, multifamily agency seller/servicers and distressed debt investors. Special servicing is performed based on third-party appointments from controlling classholders, as neither Midland nor PNC purchase controlling-class positions in CMBS transactions. Midland s named CMBS special servicing portfolio includes a mix of legacy and new-issue CMBS transactions. See page 17 for Servicer at a Glance details. Midland acts as an outsourcing vendor providing private label servicing for three commercial real estate mortgage servicers totaling over 8,000 loans and $84.4 billion through its shared servicing platform. Shared servicing functions include payment processing, loan administration, escrow and reserve administration and monthly remittance and reporting. Key Rating Drivers Related Research Fitch Affirm Midland Loan Services CMBS Servicer Ratings (September 2014) Fitch Affirms PNC Financial s L-T IDR at A+ Following Large Regional Bank Review; Outlook Stable (October 2014) CMBS Special Servicing Index (September 2014) Company/Management: Midland is a complimentary business line to other PNC Real Estate businesses. PNC provides capital to support Midland s investment in commercial and multifamily mortgage servicing rights; funding for servicing advances; and significant infrastructure and support services including legal, technology, human resources, finance, compliance and risk management. Master/primary managers average 24 years of experience and 18 years with Midland. Special servicing managers average 20 years of experience and 15 years of tenure. Staffing and Training: Turnover was a modest 14% for master/primary servicing employees but elevated for special servicing, with 43% turnover among asset managers for the 12 months ended March Master and primary servicing employees completed an average of 37.5 hours of training and special servicing employees completed 36.7 hours for the same period. Procedures and Controls: Midland maintains high-level master/primary servicing policies supplemented by detailed desktop procedures that are reviewed and updated annually. Special servicing procedures are high level and updated as needed, typically less than annually. Quality control and regulatory compliance groups are responsible for oversight of more than 200 internal compliance controls. Managers are responsible for each control and are required to evaluate, document and certify their operating effectiveness quarterly. Financial Condition: Fitch Ratings maintains a long-term issuer default rating (IDR) for PNC of A+ / Stable. Analysts Adam Fox adam.fox@fitchratings.com Howard Miller howard.miller@fitchratings.com Technology: Midland s core servicing system is Enterprise!, which was developed and is maintained by Midland. Enterprise!, which is licensed to a number of other commercial loan servicers, is supported by a dedicated team of programmers and software developers. Midland s ancillary software applications are highly integrated with Enterprise!. Defaulted/nonperforming loan management is performed in a special servicing asset management application.

2 Company Overview Midland is the commercial mortgage servicing division of PNC Real Estate, and an essential business of PNC. PNC Real Estate has over 1,000 employees across 35 cities and provided over $15 billion of capital to real estate clients in Other PNC Real Estate business segments include real estate banking, multifamily agency finance and tax credit finance. Midland is a significant contributor to the overall income of PNC Real Estate and considered an important component in maintaining a moderate risk profile and diverse revenue streams. PNC provides capital to support Midland s investment in commercial and multifamily mortgage servicing rights, funding for servicing advances and significant infrastructure and support services including legal, technology, human resources, finance, compliance and risk management to Midland. Midland has been servicing and special servicing CMBS loans since 1992 and operates as a pure third-party servicer of CMBS loans (as it does not invest in CMBS bonds), performs commercial servicing functions for PNC Real Estate and developed and maintains its Enterprise! technology platform. The company does not have offshore operations, nor does it outsource a material amount of servicing functions. Servicer Ratings Fitch rates primary and master servicers, which protect the interests of the certificateholders in the trust, by servicing and administering the mortgage loans. The primary servicer is responsible for day-to-day servicing functions, while the master servicer is responsible for monitoring the activities of the primary servicers, investor reporting, and timely remittance of funds to trustees. Fitch also rates special servicers, which are key to maintaining the credit quality of a pool containing nonperforming commercial mortgages and real estate-owned assets. The special servicer is responsible for working out loans, foreclosing, and liquidating assets. In assessing and analyzing the capabilities of primary, master, and special servicers, Fitch reviews several key factors, including the management team, organizational structure and operating history, financial condition, information systems, and, with respect to the special servicer, workout and asset disposition experience and strategies. Fitch rates commercial mortgage primary, master, and special servicers on a scale of 1 to 5, with 1 being the highest rating. Within each of these rating levels, Fitch further differentiates ratings by plus (+) and minus ( ) as well as the flat rating. In addition to its core CMBS servicing portfolio of $139.8 billion, Midland provides servicing functions for $78.0 billion of multifamily agency loans, servicing support for $73.4 billion of commercial real estate loans on behalf of institutional clients, specialty finance servicing of $18.8 billion and loan management services for $41.3 billion of government agencies as of March 31, In 2013, the company continued to diversify its commercial servicing and was named master servicer for four and special servicer for one single-family rental securitizations, seven whole business securitizations, six telecommunications tower securitizations and two Canadian CMBS transactions. Related Criteria Rating Criteria for U.S. Commercial Mortgage Servicers (February 2014) Rating Criteria for Structured Finance Servicers (January 2014) Midland Loan Services 2

3 Midland receives special servicing assignments through its relationships with investors and is an active provider of due diligence services to subordinate investors. As a third-party servicer, Midland s special servicing portfolio changes due to control shifts in legacy CMBS transactions as losses are incurred. While the company has replaced runoff in legacy transactions with appointments for new issue transactions, the company s active CMBS special servicing portfolio has declined to $539.9 million as of March 2014 from $4.0 billion as of year-end 2011 as new transactions have minimal defaults. Total Servicing Portfolio Overview ($ Mil.) 3/31/14 12/31/13 12/31/12 UPB Total Servicing Portfolio ($ Mil.) 310, , ,906.6 No. of Loans Total Servicing Portfolio 30,373 30,196 31,843 UPB CMBS Primary Servicing ($ Mil.) 118, , ,625.3 No. of Loans Primary Servicing 9,700 9,872 9,748 UPB CMBS Master Servicing ($ Mil.) 115, , ,224.4 No. of Loans Master Servicing 8,867 9,084 8,481 UPB CMBS Named Special Servicing ($ Mil.) 78, , ,146.3 No. of Loans Named Special Servicing 4,143 4,044 5,475 UPB CMBS Actively Special Servicing ($ Mil.) a ,126.9 No. of Loans Actively Special Servicing a a Including REO. UPB Unpaid balance. Headquartered in Overland Park, KS, Midland maintains satellite offices in: Little Rock, AR (technology services). Atlanta (special servicing). Pittsburgh (construction loan administration services). Washington, D.C. (business development and government services). Financial On Oct. 7, 2014, Fitch affirmed its long-term IDR for PNC Financial Services Group, Inc., the holding company of PNC, as A+ /Stable. Fitch s most recent assessment of PNC Financial Services Group, Inc. noted its strong risk-adjusted earnings profile, solid liquidity profile, low level of loan losses and consistency of operating performance through the recent financial crisis. These strengths are somewhat offset by a larger relative impact on capital ratios from Basel III and some tail risk related to mortgage-related issues, including pending and potential litigation, mortgage repurchases expenses and future risk related to equity end of draws. Employees As of March 31, 2014, Midland maintained a total staff of 479 employees, consisting of 386 staff level and 93 management personnel. On a net basis, the number of employees remained stable over the past 12 months as staff reductions in special servicing were offset by staff increases in master/primary servicing. Midland Loan Services 3

4 Employee Statistics No. of Employees Avg. Years Industry Experience 3/31/ Avg. Years Tenure % Turnover Avg. Years No. of Industry Employees Experience Avg. Years Tenure Master/Primary Servicing Senior Management Middle Management Servicing Staff Total Special Servicing Senior Management Middle Management Servicing Staff Total Master/Primary Servicing The company s master/primary and special servicing management teams are among the most experienced and tenured of Fitch-rated servicers. Master/primary servicing operations experienced modest aggregate turnover of 14% for the 12 months ended March 2014, an increase from 9% during the 12 months ended March Turnover was elevated at 16% for staff-level employees, nominal for middle management and 9% for senior management due to the retirement of one senior manager who had been with the firm for 22 years. Staff turnover was the result of 55 departures, primarily in Kansas City, of which 87% were voluntary and 9% were internal transfers to other PNC divisions. Despite recent turnover, the average tenure and experience of master and primary servicing employees were not negatively impacted. Management employees average 24 years of industry experience with 18 years of tenure, while staff-level employees have nine years of average experience and seven years with Midland. Twenty-two master/primary servicing employees are located in satellite offices and responsible for construction loan or government servicing functions. Senior managers of the commercial loan servicing group monitor the size and projected growth of Midland s servicing portfolio and adjust staffing levels in anticipation of future needs and servicing requirements. Management reviews monthly reports detailing the projected servicing pipeline, the size of the loan portfolio and the complexity of the loans. All major transactions and acquisitions are evaluated relative to staffing levels and servicing requirements prior to pursuing the new servicing. Special Servicing Turnover within the special servicing group was elevated at 22% for the 12 months ended March 2014, up from 7% the prior year. Turnover was highest among staff-level employees at 26%, while middle managers averaged 13% turnover due to one voluntary departure. There was no turnover among senior managers, which had experienced 33% turnover in There were 11 employee separations from the special servicing group consisting of five voluntary and five involuntary departures, as well as one internal transfer. Involuntary departures were due to the April 2013 consolidation of special servicing functions into the Overland Park office in response to declining special servicing volume. Special servicing managers average 20 years of industry experience and 15 years with Midland, while staff-level employees average 14 years of experience and 10 years of tenure. Midland Loan Services 4

5 Within the special servicing group, 13 employees are classified as asset managers, possessing more than three years of experience and are actively working out defaulted loans. Asset managers, who average 16 years of experience and 10 years of tenure, maintain an assets to asset manager ratio of 6:1, approximately half the average of Fitch-rated servicers with large volumes of defaulted loans. In addition to CMBS special servicing, asset managers also work on non-cmbs specially serviced assets, as well as projects such as due diligence assignments for third-party clients. Senior managers of the special servicing group meet weekly to evaluate staffing levels, capacity issues and opportunities for increased efficiency. Midland has addressed staffing needs through a combination of reassigning capable resources from/to other Midland/PNC departments such as Midland s performing loan asset management group to retain employees with commercial real estate experience. Training Midland provides employees with several training options, including instructor-led and web-based training, with the goal of developing specific skills needed for their position, broadening industry knowledge and that of the overall operations of Midland. In addition, employees are required to complete annual regulatory and compliance training dictated by PNC. Individual training goals are established and reviewed during annual and midyear performance reviews. Midland provides employee training through the Midland employee enrichment training (MEET) program. The program provides structured and sequenced series of courses and activities. Employees have access to MyLearning, which covers hundreds of web-based, self-paced learning modules including Skillsoft, a catalog of over 300 courses covering topics and skills such as leadership, customer service, communication and decisionmaking; Intuition, a library of web-based courses on general financial market topics and business skill courses; and Institute for Credit Education, which provides access to credit-related education for all PNC employees. Employee training hours improved for the 12 months ended March 2014 to an average of 37.5 and 36.7 for master/primary and special servicing employees, respectively. Midland maintains dedicated and distinct compliance and internal audit functions separate from servicing operations, which Fitch considers a best practice of highly rated servicers. In addition to its MEET program, Midland offers employee training through the Mortgage Banker s Association of America (MBA), with the ability to obtain the certified mortgage servicer designation. Instructor-led courses include MBA and commercial mortgage servicing criteria, real estate fundamentals and current market topics. Additional instructor-led training is administered to the special servicing group and recent topics have included process of depositions, attorney/client privilege, one-action states, nonjudicial foreclosure and bankruptcy. Midland has established minimum training hours of 30 for staff and 20 for managers in In 2013, master and primary servicing employees completed an average of 37.5 hours of training and special servicing employees completed 36.7 hours, consistent with other highly rated servicers. Internal Control Environment Midland maintains an effective and multifaceted internal control environment consistent with large institutional banks. Controls are established by documented policies and procedures, with oversight performed by dedicated compliance and internal audit resources, as well as third-party external audits, including an annual Statement on Standards for Attestation Engagements (SSAE 16 [SOC 1]) audit. Midland Loan Services 5

6 Policies and Procedures Midland s policy is to review and update policies and procedures on an annual basis. The most recent update occurred in fourth-quarter 2013 and was focused on aligning individual department controls with SSAE 16 controls. Policies and procedures are available to all employees via a shared directory, with oversight provided by Midland s mortgage-backed securities administration group, which is responsible for ensuring all members of Midland s management team and staff are fully aware of the unique requirements of providing master, primary and special servicing for mortgage-backed securities as detailed in each transaction s PSA. Fitch found Midland s special servicing procedures to be less detailed than other highly rated servicers, and most policies did not show evidence of review or update within three years. Fitch reviewed a sample of master and primary servicing policies and procedures that had been reviewed, with minor updates made in Servicing policies are high level and provide process flow diagrams and an overview of servicing functions. These general policies are supplemented by detailed desktop procedures that provide step-by-step instructions, screen prints and illustrative examples of how specific functions are performed. Desktop procedures are not necessarily reviewed annually. Fitch also reviewed a sample of special servicing procedures, which provides a high-level overview of each function and a general procedural outline, sometimes supported by related forms. While it is Midland s policy to review policies and procedures annually, Fitch noted most special servicing procedures were last reviewed in Compliance and Controls Midland maintains a comprehensive internal control environment consisting of quarterly quality control reviews and management certifications, annual internal audits and third-party external audits of servicing functions. Fitch reviewed a sample of Midland s internal control reports for insurance tracking, cash reconciliation and tax monitoring and found them effective control measures. Midland has a dedicated quality control and regulatory compliance department (quality control) that is independent of its operations and technology divisions. The department, which consists of a senior vice president and eight quality control specialists, has separate groups for quality control and compliance. The quality control group provides quality assurance validation, audit coordination, control monitoring and testing, completion of various operations reviews and subservicer reviews. The regulatory compliance group provides direction and support to the Midland organization in the areas of corporate governance, asset protection, compliance verification and strategic guidance. The core of Midland s internal control environment is 236 comprehensive internal controls identified by management and assigned to control owners. Ten of the internal controls address special servicing asset management and work out cash control functions. The operational oversight of workouts is done separately through exception reports. The quality control group oversees the administration of the controls as a whole while each control is assigned to an owner who is required to evaluate, document and certify, on a quarterly basis, the operating effectiveness of their assigned controls. A summary of the quarterly certifications is provided to senior management for evaluation. Internal Audits Midland s commercial servicing operations and technology division are audited by the internal audit division of PNC. The PNC internal audit team is responsible for oversight of Midland and consists of five auditors reporting to the executive vice-president general auditor of PNC who reports to the PNC corporate audit committee. The PNC internal audit team assesses Midland s compliance with third-party contracts and PNC policies and procedures. The scope and frequency of the audits are determined by PNC, but generally include an annual review of Midland s technology infrastructure and general servicing operations, including Sarbanes-Oxley compliance, vendor management and anti-money laundering. Midland Loan Services 6

7 External Audits Midland is subject to annual Reg AB and USAP audits for its CMBS portfolio. In addition, the company undergoes an annual commercial real estate services and technology solutions SSAE 16 (SOC 1) report. Fitch reviewed the company s Reg AB, USAP and SSAE 16 reports, which did not contain material findings. Midland is also subject to periodic audits for safety and soundness from PNC. Reviews are also done throughout the year for the U.S. Department of Housing and Urban Development, Sarbanes-Oxley and Basel compliance. Audit Date Auditor Regulation AB Dec. 31, 2013 PricewaterhouseCoopers USAP Dec. 31, 2013 PricewaterhouseCoopers Information Technology Midland s special servicing technology, while sufficient to meet its current portfolio, compares less favorably to systems used by high-volume special servicers that make greater use of business plan automation, scenario analysis and REO accounting. Midland currently uses Enterprise! loan management system as its primary servicing system. Enterprise! was developed by Midland and licensed to other servicers and hosted by Midland. The company uses the following secondary systems to support servicing functions: Special Servicing Asset Management (SSAM) asset management and workflow tool. CMBS Document Library transaction document library. Document Insight digital document management tool. FileNet document imaging storage and retrieval tool. Consolidated Receipts Processing loan payment receipts tool. Investor Reporting Module remittance data aggregation application. Bank Account Reconciliation System cash and bank account reconciliation application. CMBS Investor Insight CMBS loan and transaction information portal. Borrower Insight borrower interface portal. Enterprise! is integrated with several supporting applications such as the SSAM, automated transaction processing, consolidated receipts processing and investor-reporting applications. Midland has a dedicated group responsible for building and maintaining custom reports to supplement the more than 200 reports available in Enterprise!. Midland s business information/data warehouse program allows for a centralized reporting environment across all servicing databases to manage reporting and information outputs, providing reports in areas of delinquency, portfolio statistics, runoff, deposits and special servicing for management and servicing operations. The Midland application support team provides support for software application issues, while the PNC help desk is responsible for network and PC hardware issues. Second-level support groups include network services, system operations and software development groups. Disaster Recovery/Business Continuity Plan Midland maintains a business continuity program that includes testing of critical systems based on established recovery time objectives. The plan is maintained by the PNC real estate technology risk management group, which is responsible for testing, maintenance and audit reporting of the plan. Servicing managers attend annual business continuity training and are responsible for informing direct reports as necessary. The most recent test occurred in April 2014 and was considered by Midland to be successful. Midland s Overland Park, KS office acts as the primary data center for servicing operations. The office has a redundant power system that can provide power for up to 36 hours and can be extended with the delivery of additional fuel from contracted providers as needed. In the event Midland Loan Services 7

8 of a disaster recovery event, critical servicing applications can be restored within 48 hours and the maximum possible loss of data is one hour. Remote network access is available for employees in the event Midland s office is inaccessible. While Midland does not maintain or contract for a local offsite office for employees, business operations can be relocated to the company s Little Rock, AK office approximately 320 miles away that can accommodate up to 120 employees. Primary Servicing While Midland s CMBS primary servicing portfolio increased 21% by balance since year-end 2011, non-cmbs servicing increased 28% for the same period, reflecting the company s efforts to diversify its servicing products and clients. Midland performs commercial mortgage servicing and subservicing for CMBS trusts, portfolio lenders, institutional investors, financial institutions, specially finance companies, mortgage bankers and multifamily agency seller/servicers. As of March 31, 2014, Midland acted as primary servicer for 9,700 CMBS loans, representing $118.5 billion in outstanding balance, and 19,239 non-cmbs loans with an unpaid balance of $171.7 billion. New Loan Setup As primary servicer, Midland receives new loans individually or through bulk data transfers, with each scenario following a different initial process but the same quality control review. Midland s new loan setup procedure is to perform a full file scrub for each new loan to ensure all loan covenants, terms and structures are identified, tracked and monitored. Account managers are responsible for working with the servicing transfer department to board new loans that are not part of a bulk transfer. The account manager acts as the point person for all documents and forwards them to the servicing transfer department, where they are inventoried, logged, imaged and loaded into Enterprise!. Primary Servicing Portfolio Overview 3/31/14 12/31/13 12/31/12 CMBS No. Transactions Primary Servicer UPB Primary Servicing ($ Mil.) 118, , ,625.3 No. Loans Primary Servicing 9,700 9,872 9,748 Non-CMBS UPB Non-CMBS Servicing ($ Mil.) 171, , ,448.4 No. Loans Non-CMBS Servicing 19,239 18,849 21,279 UPB Unpaid balance. Setting up new loans is the responsibility of the servicing transfer department, which logs new loan requests into a setup database and assigns an analyst to complete the loan setup process. Once the initial loan setup process is completed, a senior analyst performs a quality control review and activates the loan. Accurate and timely boarding is done through segregation of duties between setup and quality control and exception report monitoring. Individual new loans are set up within three to five days of receipt and 15 days prior to the first payment due date. Bulk data transfers are the most common new loan setup for CMBS loans. Midland requests critical data elements that are then reviewed and code interpreted for transition into Enterprise!. The servicing transfer administration group conducts an audit of all converted information against critical information shown on the trustee s annex of loan information. The loans are uploaded to Enterprise! once all data discrepancies have been resolved. Once data have been transferred to Enterprise!, additional audits are performed by the ARM/accrual department of Midland Loan Services 8

9 financial terms, and the servicing transfer group audits nonfinancial terms. Both audits verify that the data are in agreement with the terms of the loan documents and identify covenants and other servicing responsibilities. Accounting and Cash Processing Loan payments are posted daily by Midland s treasury operations department using the central receipts processing (CRP) application that automatically matches cash receipts to expected receivables and automatically posts payments to the appropriate loan. The CRP application is used to process automated bank files and manual transactions. The treasury operations department also performs daily reconciliations of cash receipts, comparing money totals and bank account interface files with money posted to the CRP application. Payments received by Midland are via automated clearing house (ACH;48%), lockbox (26%), cash managed wire/ach/check (15%) and wire (11%). The treasury department is also responsible for monitoring contractual account requirements for banks holding custodial servicing deposits. A staff member performs a monthly review of bank rating requirements for compliance with servicing agreements and submits a report to management for verification and signoff. Midland has a dedicated complex loan administration group responsible for calculating and processing the waterfall allocations of cash managed loans. The treasury department is responsible for maintaining and operating the payment collection network, which includes ensuring that lockboxes are established and maintained in accordance with the governing documents. Depending on the requirements of the loan agreement, the complex loan administration group also handles remitting excess funds back to borrowers or wiring funds to the mezzanine servicer. Midland incurred deminimus tax penalties in 2013, a majority of which were associated with loans transferred from another servicer. While Midland performs all insurance compliance verification, a third-party vendor is used for administrative functions such as collection calls and policy indexing. The investor accounting department, staffed by eight employees, is responsible for reconciling all custodial bank accounts daily. Midland s Enterprise bank account reconciliation system is used to compare the servicing system ledger balance for principal and interest, escrows, reserves and suspense to the bank balance for all custodial bank accounts. Escrow Administration The tax group is responsible for researching and establishing real estate tax information for all loans serviced by Midland. This responsibility includes paying escrowed tax bills, verifying the adequacy of escrow amounts, monitoring non-escrowed loans to verify tax payments and customer service for tax inquires. Midland utilized three tax service providers in 2013 to make 113,000 tax payments on more than 71,000 parcels. The vendors are required to supply Midland with data on loans with taxes due that are uploaded into Enterprise!. Any inconsistencies in tax payments are researched and resolved, with the tax team leader responsible for monitoring progress and approving disbursements prior to payment. Tax and insurance escrow analysis is performed on an annual basis during the month following the last tax or insurance disbursement. After the analysis is performed, if an increase or decrease in the escrow payment is needed, the borrower is provided with a minimum of 30 days notice prior to the adjustment. Management monitors the timely and accurate escrow analysis using exception reports. Midland s insurance group monitors the maintenance and payment of insurance premiums to ensure compliance with the loan documents. Insurance policy information, policy premiums, payment frequency, due dates and payment status are maintained in Enterprise!. Insurance Midland Loan Services 9

10 oversight is performed through a weekly report that tracks premiums paid from escrow accounts, receipt of proper insurance documentation and premium payments outstanding. Midland follows up with borrowers and insurance agents on all loans until discrepancies are resolved. Uniform commercial code (UCC) records are maintained on the servicing system by the UCC group. The group monitors UCC expirations six months in advance and utilizes a third-party vendor to prepare and file continuation statements. The group is also responsible for UCC terminations and amendments, as well as changes to secured party and collateral/legal descriptions. Asset Administration Delinquent payments are monitored by Midland s collections department, which begins contacting borrowers once the grace period has expired both by telephone and a payment reminder mailing. Formal collection letters are mailed when a loan is 30 days past due. Loans for which a payment is not received within 60 days are referred to the special servicer. Management reports monitor the number of collection calls made, the number of borrower contacts made and the number of payment arrangements made. The collateral surveillance department is responsible for the collection and analysis of operating statements. Financial statement analysis is done within Midland by new and experienced analysts who are required to complete a training program of 20 core courses in financial statement analysis for CMBS loans. Quality control oversight is performed by the assigned portfolio analyst, with particular attention paid to watchlist loans. Midland enters and maintains tenant rent roll data electronically to monitor tenant rollover. Midland utilizes a third-party contractor for financial statement analysis and any necessary borrower contact for collection or clarification. Midland utilizes the CREFC Investor Reporting Package watchlist criteria in addition to its own internal criteria for an internal watchlist. The creation and management of the watchlist is the responsibility of the collateral surveillance department. Oversight of the watchlist is done by a formal watchlist group. The group is responsible for determining appropriate actions for watchlist loans, determining the materiality of a problem loan, overseeing additions, deletions or changes in the status of the watchlist and facilitating accurate and timely communication with investors and servicers. Watchlist comments are reviewed on a monthly basis and updated at least every 60 days. Midland is responsible for performing over 10,000 commercial real estate property inspections annually utilizing third-party contractors for the majority and in-house resources for the remainder. Borrowers are notified in advance of a property inspection, which includes a property management interview, rent roll review, and market and physical property assessments to identify potential risks. Inspection reports are reviewed by analysts who summarize any deferred maintenance issues, which are tracked and communicated to the borrower for remediation. Investor Reporting Midland maintains both investor- and borrower-dedicated web portals to disseminate information. Fitch s surveillance group finds Midland s investor website helpful in obtaining current loan and property-level information. Midland maintains a dedicated investor accounting group staffed by 42 employees and five managers who are responsible for remittance calculations, servicing advances, bank reconciliation and interfacing with other servicers to determine remittances, realized losses and compliance functions. The majority of investor reporting functions are automated by data extracts from Enterprise! on the determination date. Investor accounting analysts perform in Midland Loan Services 10

11 excess of 50 quality control checks to validate key data elements, including cash remittance fields, as well as loan and property data. The investor reporting group tracks reporting and remittance errors, of which there have been six in the past 12 months; three were due to incorrect or late information from other servicers. Customer Service Midland does not offshore any servicing functions, nor do any of its vendors. Midland has a dedicated borrower services group responsible for borrower communication through telephone calls, mail correspondence or the Borrower Insight web portal. A department manager or senior staff member regularly monitors telephone calls as a quality control measure. In addition, Midland maintains a borrower web portal called Borrower Insight through which borrowers can access balances, payment histories and billing information. Approximately 35% of Midland s primary serviced borrowers have accessed the website. Midland monitors borrower satisfaction through periodic customer surveys, as well as input from senior account and portfolio representatives who are in regular contact with borrowers and major clients. Outsourcing Midland maintains responsibility for and retains the ability to perform all wholesale servicing functions. However, the company contracts certain aspects of servicing functions to third-party contractors, including financial statement analysis, tax service providers, UCC filing, collateral release, data entry, some borrower contact and property inspections. Vendor contracts generally do not have specific expiration dates and can be terminated by either party within 60 days. All contracts are subject to oversight by PNC s Supplier Relationship Management program. Vendor Management Vendor oversight is performed per PNC s Supplier Relationship Management program that requires an in-depth risk assessment of each supplier based on the scope of work, data and technology maintained by the supplier. The program is administered by Midland s quality control group and ongoing oversight and monitoring rests with individual business lines. Suppliers are required to submit policies and procedures, technology and security questionnaires and audit oversight. Master Servicing While Midland performs an annual audit of primary servicers, Fitch noted that only four primary servicers received a full audit in 2013, and the remaining 26 received desktop reviews. As of March 31, 2014, Midland was named master servicer for 189 CMBS transactions totaling $115.9 billion, with more than 8,800 loans, as well as approximately 30 non-cmbs structured finance and whole business securitizations. Also, as of the same date, Midland oversaw 35 third-party CMBS primary servicers responsible for servicing 1,434 loans totaling $20.6 billion. Master Servicing Portfolio Overview 3/31/14 12/31/13 12/31/12 No. of Transactions Master Servicing UPB Master Servicing ($ Mil.) 115, , ,224.4 No. of Loans Master Servicing 8,867 9,084 8,481 No. of Primary Servicers Overseen UPB Unpaid balance. Midland Loan Services 11

12 Primary Servicer Oversight Primary servicer oversight is performed by the quality control group though an annual audit schedule based on servicer performance, external audit results, servicing volume and number of top 10 loans within a transaction to determine whether an onsite or desktop audit is performed and the frequency of audits. Midland s primary servicer audit consists of an operational review and sample testing to evaluate a servicer performance of core servicing functions. Audit findings are reviewed by a subservicer oversight working group and servicers are provided feedback on any finding and recommendations. In addition to primary servicer audits, the quality control group verifies primary servicers compliance with servicing requirements through annual Reg AB and USAP audits. Advancing While Midland performs a periodic review of trustee statements to verify the accuracy of payment information, interest distributions and shortfalls reported, Fitch believes a highly rated servicer should monitor the reporting of all transactions monthly. The CMBS advance review group (ARG) is responsible for monitoring and controlling the amount and credit quality of advances made by Midland, with the ultimate goal of eliminating nonrecoverable advances. The six-person group, which meets monthly, is composed of a senior representative from the CMBS administration, servicing operations, asset management, investor reporting and special servicing groups. Advances are categorized based on four levels, reflecting the dollar amount advanced relative to potential recovery and the length of time advances are outstanding. Midland has established criteria for determining nonrecoverability that measure total advances, advance interest and property protection advances at the loan level relative to recovery value. The ARG considers the business plan of the special servicer and the availability of information, including multiple property valuations, when making nonrecoverability determinations. Investor Reporting Fitch believes a centralized point of contact for loan inquiries, such as Midland s surveillance group, is effective in managing information flow and responsiveness. The CMBS surveillance group is the primary liaison between Midland s operational group and investors, primary servicers, trustees and rating agencies. The group has a dedicated mailbox that is monitored hourly for incoming requests. The group responds to all inquiries via or phone contact. Information typically provided includes loan and property performance updates, financial data, operating statement analysis reports, property rent rolls and site inspections. The surveillance group is also responsible for monitoring all CMBS portfolios and detecting emerging issues and changes in loan or property performance. The group also conducts monthly conference calls with special servicers to provide up-to-date information on underperforming properties or loans of concern. Special Servicing Special Servicing Portfolio Midland does not maintain separate loan workout and REO teams, as is common among highly rated servicers; however, the current volume does not justify specialized teams. As of March 31, 2014, Midland was named special servicer for 4,143 CMBS loans totaling $78.2 billion in 124 transactions. As of the same date, the company had 73 actively specially serviced loans, with an outstanding balance of $539.9 million and was managing seven real estate owned (REO) assets with a balance of $177.8 million. There are also $17.6 million of active non-cmbs assets in special servicing of the company s named $532.0 million non-cmbs portfolio. Midland s non-cmbs portfolio comprises sub- and nonperforming commercial real estate assets. Midland Loan Services 12

13 The special servicing group consists of two special servicing teams of asset managers and analysts: the real estate solutions team that is responsible for borrower consents and special servicing administration and compliance, and the collateral management services team that is responsible for due diligence, surveillance and risk assessments. This structure is unique to Midland as an exclusively third-party special servicer and contract due diligence provider. Special Servicing Portfolio Overview 3/31/14 12/31/13 12/31/12 CMBS No. of Transactions Special Servicer UPB Named Special Servicer ($ Mil.) 78, , ,146.3 No. of Loans Named Special Servicer 4,143 4,044 5,475 UPB Actively Special Servicing (Non-REO) ($ Mil.) ,023.9 No. of Loans Actively Special Servicing (Non-REO) UPB REO Assets ($ Mil.) No. of REO Assets Non-CMBS UPB Named Special Servicer ($ Mil.) No. of Loans Named Special Servicer UPB Actively Special Servicing (Non-REO) ($ Mil.) No. of Loans Actively Special Servicing (Non-REO) UPB REO Assets ($ Mil.) No. of REO Assets UPB Unpaid balance. Loan Administration Midland has numerous queries and reports to identify watchlist loans, maturing loans and loans with deteriorating conditions on all loans where Midland is the named special servicer using data compiled from a third-party data provider. These data queries are the basis for Midland s surveillance of nondefaulted loans and allow the company to quickly assess the impact of potential credit events such as tenant bankruptcies, store closings and natural disasters. In addition, the real estate solutions team maintains contact with all master servicers to facilitate the review of borrower consents and maintains an open dialogue on potential loan transfers. Defaulted/Nonperforming Loan Management The special servicing group has established effective procedures with external master servicers for the transfer of loans to Midland as special servicer. Transfer packages are received by a servicer liaison team that then updates Enterprise! to begin CREFC reporting. Asset managers are assigned based on factors such as the size of the loan, the skill set of the asset manager, prior experience in the market for the collateral and the complexity of the asset. Midland s policy requires that asset managers perform an initial file review through SSAM within 10 days of transfer. The purpose of the initial file review is to familiarize the asset manager with the details of the loan documents, identify any incomplete or missing documentation, document applicable property and loan-specific information, identify an initial plan of action and to provide a basis for initial discussions with the borrower and guarantors. The completed initial file review is approved by the asset manager s direct manager. Upon transfer of a loan to special servicing, the asset manager will also conduct an inspection and analysis of the property, financial statements, market conditions and other factors that may impact Midland Loan Services 13

14 the property value. The asset manager may obtain personal credit reports on individual borrowers/guarantors; research PACER, Lexis/Nexis or other databases to which Midland subscribes; and/or access available records through the Internet. Asset managers typically create an asset status report (ASR) within the first 45 days of transfer or earlier if required by the PSA that outlines the proposed disposition method based on initial information. Generally, Midland pursues a dual-track resolution strategy of pursuing foreclosure while negotiating with the borrower. The asset manager also reviews the PSA to ensure compliance with the default, foreclosure and REO provisions in the event that a consensual workout with the borrower cannot be reached and foreclosure is necessary. The ASR report is forwarded to the directing certificateholder for their review and/or approval as required by the PSA. Once the initial diligence on the asset and borrower has been completed, the asset managers, in consultation with their manager, develop a resolution strategy, which is outlined in a request for approval case and approved based on Midland s delegations of authority. In evaluating possible resolution strategies, such as reinstatement, forbearance, modification, discounted payoff, foreclosure, receivership sale of collateral, guarantor pursuit, REO sale, REO stabilization, note sale or a combination thereof, asset managers prioritize alternative strategies based on the highest net present value (NPV) achieved. Day-to-day asset management monitoring is performed by an oversight manager that meets with asset managers monthly to review the progress of each special serviced loan and compliance with Midland s policies. In addition, asset managers enter key dates and resolution milestones such as appraisal and inspection dates, comments, ASRs and alerts into SSAM, which generates exception reports for senior managers. Midland maintains a delegated authority matrix for approval of all resolution recommendations and document execution, which requires an approval for each action by a senior manager not responsible for the daily management of the asset or oversight of the asset manager. Additionally, managers who perform asset management oversight are not members of Midland s asset review working group, which reviews recommended actions according to Midland s delegation of authority for loans in excess of $15 million. The asset review working group is composed of senior servicing and special servicing managers, members of the legal and compliance groups and chaired by the senior vice-president of servicing. REO Management Midland has written policies and procedures for the management of REO properties that its asset managers are required to adhere to. Midland does not have a separate REO group, so responsibility for foreclosure and liquidation remains with the original asset manager. When foreclosure is required, the asset manager prepares a foreclosure case that describes the property and its environmental condition and identifies a property manager and broker should the trust be the successful bidder at the foreclosure sale. Similar to ASR reports, the foreclosure case is approved prior to taking title to an asset, according to Midland s delegation of authority. The REO business plan details the property and local market in detail and recommends a disposition strategy based on an analysis of the alternative resolution strategies, including at a minimum as-is brokered sale, stabilized brokered sale and property auctions. The business plans also include operating and maintenance plans and budgets, if necessary. The asset manager also obtains current broker opinions of value and appraisals as required. After sufficient marketing and competitive bidding, the asset manager prepares an REO disposition case recommending the sale of the property. The disposition case outlines the marketing Midland Loan Services 14

15 process and results, sale terms and estimates the loss due to the sale together with an analysis of alternative strategies. This case is also approved subject to Midland s delegations of authority or asset review working group depending on the outstanding balance. Third-party property managers and brokers are identified and interviewed based on their local experience with the subject property type and are retained using standard form agreements that are terminable by either party with 30 day s notice or in the event of a sale. Property managers are required to provide monthly operating statements, account reconciliations and rent roll for each property, which are reviewed and reconciled by the collateral management services team as well as the asset manager. Governance and Conflicts of Interest Managing Potential Conflicts Potential conflicts of interest in special servicing arise through various forms, particularly as investors retaining controlling positions in securitizations or specific loans have influence on workout strategies and the ability to select the special servicer. Midland performs CMBS special servicing exclusively for third-party controlling classholders who have the right to appoint special servicers. PNC does not invest in CMBS B-pieces or subordinate loans for which Midland would be appointed special servicer. Midland s stated conflict-management philosophy is to identify and document potential conflicts of interest for every transaction, communicate areas of potential conflicts of interest with all transaction parties and monitor ongoing potential conflicts. To support this effort, Midland employees are required to comply with PNC enterprisewide policies and procedures. This includes a code of business conduct and ethics policy and an employee conduct policy that Midland employees are required to certify compliance, as well as complete annual compliance training. In addition, the PNC compliance and risk management departments provide ongoing surveillance and oversight of the policies and employee compliance. Although PNC does not own a controlling interest in BlackRock, Fitch views BlackRock as an affiliate of Midland, for which the company has established policies and procedures in place to mitigate potential conflicts of interest, which Fitch views as a best practice of servicers with potential conflicts. Affiliated Companies Midland began using the structured products group (SPG) within PNC bank to broker note sales in As of June 2014, approximately half of the 20 notes sales were brokered through SPG at an average fee of 1.52%, comparable to broker fees on non-spg assets. Midland does not have a specific policy regarding the engagement of SPG for note sales; however, it will only do so with controlling-class holder consent. In selecting SPG as note sale broker, Midland evaluated two or more other brokers on half of the loans sold through SPG. Neither Midland nor PNC currently use affiliate companies that provide real estate management services or commercial real estate property brokerage services. Affiliate PNC entities may provide commercial real estate financing options to maturing CMBS loans. PNC has an approximately 21% noncontrolling minority interest in BlackRock, who invests in investment and below investment-grade CMBS bonds, for which Midland may be the master and/or special servicer. As part of PNC, Midland is required by federal law to treat its transactions with BlackRock as a related affiliate and is governed by section 23B of the Federal Reserve Act of The act allows related affiliates to conduct business with one another only on terms and under circumstances, including credit standards, that are substantially the same, or at least as favorable to the bank or its subsidiaries as in transactions with non-affiliates. Midland Loan Services 15

16 Fitch found Midland s business plans to be thorough, presenting a clear and concise rationale, consideration of alternative resolution strategies, an NPV analysis and clear reasoning for the resolution method selected. Midland has a policy that clearly states all transactions with BlackRock are to be treated the same as any non-affiliated entity. Fitch reviewed PNC s governance guidelines for affiliate transactions and affiliate transaction compliance procedures and found both documents to be thorough, clearly identifying potential conflicts with affiliates and providing established procedures governing business interactions. With respect to BlackRock or any other third-party-controlling classholder clients, Midland s stated policy for special servicing is to pursue the resolution strategy that presents the highest recovery on a NPV basis for all investors in the transaction. Fitch reviewed a random sample of 10 business plans for specially serviced assets and found the plans to be well documented and reflected alternate resolution strategies, as well as an NPV analysis to substantiate the resolution method selected. Midland Loan Services 16

17 Servicer At A Glance Midland Loan Services Company Experience (Years) CRE Servicing 23 CMBS Servicing 22 Overseeing Primary Servicers 22 CRE Loan Workout 23 CMBS Workout 22 Credit Rating Fitch Ratings has assigned PNC Financial Services Group, Inc. a rating of A+ /Stable. Experience in Industry (Years) Tenure with Company (Years) Turnover (%) Employees Number of Employees Primary/Master Servicing: Senior Management Middle Management Servicing Staff Total Special Servicing: Senior Management Middle Management Servicing Staff Total Average Training Hours Per Employee Per Year Primary/Master 37.5; Special USAP/Regulation AB Audits Completed by PricewaterhouseCoopers Servicing System Enterprise! Version 7.2 Total Servicing Portfolio Unpaid Principal Balance (UPB) ($ Mil.) 310,872.4 No. of Loans 30,373 Master and Primary Servicing Portfolio Special Servicing Portfolio (As of March 31, 2014) (As of March 31, 2014) CMBS Portfolio CMBS Portfolio Primary Servicing Named Special Servicing No. of Transactions Primary Servicer 277 No. of Transactions 124 UPB ($ Mil.) 118,492.0 UPB ($ Mil.) 78,216.0 No. of Loans 9,700 No. of Loans 4,143 Active Special Servicing, Not Including REO Master Servicing UPB ($ Mil.) No. of Transactions Master Servicer 189 No. of Loans 73 UPB ($ Mil.) 115,913.7 REO No. of Loans 8,867 UPB ($ Mil.) No. of Primary Servicers Overseen 35 No. of Loans 7 Non-CMBS Portfolio CMBS Resolutions $ Mil. No. of Loans UPB ($ Mil.) 171,730.9 Loans Resolved Since Inception 9, ,898 No. of Loans 19,239 Loans Resolved Past 12 Months Non-CMBS Portfolio Named Special Servicing UPB ($ Mil.) No. of Loans 349 Active Special Servicing, Not Including REO UPB ($ Mil.) 12.7 No. of Loans 5 REO UPB ($ Mil.) 5.1 No. of Loans 2 N.A. Not applicable. REO Real estate owned. Resolutions $ Mil. No. of Loans Loans Resolved Since Inception (2004) 1, Loans Resolved Past 12 Months Midland Loan Services 17

18 Appendix A: Primary and Master Servicing Distribution Property Type CMBS Master and Primary Servicing Portfolio (As of March 31, 2014) Securities Mixed Use 3% 5% Industrial 2% Self- Storage 2% Hotel/Motel 12% Other 4% Multifamily 23% Office 20% Retail 29% Note: Numbers may not add to 100% due to rounding. Source: Midland Loan Servcies. Geographic Distribution CMBS Master and Primary Servicing Portfolio (As of March 31, 2014) Other 49% CA 13% TX 8% FL 7% NY 9% GA 3% VA 3% AZ AL PA MI 2% 1% 3% 2% Note: Numbers may not add to %100 due to rounding. Source: Midland Loan Services. Property Type Non-CMBS Master and Primary Servicing Portfolio (As of March 31, 2014) Other 20% Securities 2% Mixed Use Land 2% 1% Industrial Healthcare 3% 2% Hotel/Motel 4% Retail 9% Office 11% Note: Numbers may not add to 100% due to rounding. Source: Midland Loan Services. Multifamily 46% Geographic Distribution Non-CMBS Master and Primary Sevicing Portfolio (As of March 31, 2014) Other 51% AL 1% MI NY 1% 7% CA 19% FL 5% GA 2% TX 6% IL 3% MD PA 3% 2% Note: Numbers may not add to 100% due to rounding. Source: Midland Loan Services. Midland Loan Services 18

19 Appendix B: Special Servicing Division Property Type CMBS Special Servicing Portfolio (As of March 31, 2014) Hotel/Motel 17% Other 6% Multifamily 11% Office 36% Retail 30% Note: Numbers may not add to 100% due to rounding. Source: Midland Loan Services. Geographic Distribution CMBS Special Servicing Portfolio (As of March 31, 2014) Other 23% TN 5% FL 5% KY 5% CA 6% PA 6% WA 7% HI 16% CO 12% VA 8% IL 7% Note: Numbers may not add to 100% due to rounding. Source: Midland Loan Services. Property Type Non-CMBS Special Servicing Portfolio (As of March 31, 2014) Other 29% Geographic Disribution Non-CMBS Special Servicing Portfolio (As of March 31, 2014) Florida 11% Retail 71% Minnesota 29% California 60% Note: Numbers may not add to 100% due to rounding. Source: Midland Loan Services. Note: Numbers may not add to 100% due to rounding. Source: Midland Loan Services. Midland Loan Services 19

20 The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright 2014 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY Telephone: , (212) Fax: (212) Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings, Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch s ratings should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed. The information in this report is provided as is without any representation or warranty of any kind. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion is based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at anytime for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. Midland Loan Services 20