Already deep into an investigation of nonbank servicers of residential mortgages, NY's Ben Lawsky is prepping a probe of commercial real estate loan servicers, reports Reuters.
At issue are whether subsidiaries are wrongly profiting from loans they are servicing. A case in point is CWCapital (owned by Fortress) - one of the CMBS industry's top 3 servicers - which manages Stuyvesant Town's $3B in defaulted CMBS. CW also controls the sale process for the complex and Fortress Investment (FIG +1.1%) is putting together a bid.
"What steps are they taking to prove they got market bids," says an observer. "That seems to me what [they] are going to check."
Starwood Property Trust (STWD -3.6%) takes the news hard.