Just as the rights, responsibilities and roles of masters and special service providers may vary between different PPE, definitions of basic concepts, such as net operating income. B may vary. In fact, the definition of a term can vary considerably between a CMBS loan contract and a pooling and service contract — for the same specific credit. While this can`t make much difference when a borrower makes all payments on time, in the event of financial or other unforeseen problems, slight differences in definitions could mean the difference between a fluid veil and a catastrophic credit default. Restrictive pooling and service agreements often prevent lenders and credit providers from changing the structure of a loan, even if it would be in the best interests of the borrower and investors. Unfortunately, CMBS pooling and service agreements are extremely long for borrowers — sometimes more than 500 pages (usually 100 pages or more of definitions alone). PSAs define the exact rights and responsibilities of each party for the duration of a CMBS operation, including the borrower, the master service that generally processes borrowers` day-to-day requests, the specialized service provider that makes a loan when the borrower becomes insolvent, and investors who generally have little say, but who can generally replace a specific service provider if they feel that the particular service provider is not in the best interests of investors. While PSA`s roles should be standardized across the industry, PPE are all a little different in practice, which has actually exacerbated confusion among Pipe Loan borrowers. To learn more about CMBS loans, fill out the form below to talk to a Conduit loan expert today! Because of this complexity, CMBS borrowers should always work with a team of experienced consultants who can ensure that they understand exactly what they are getting into. Otherwise, borrowers could be for a nasty surprise.