Standard & Poor's recently announced its partnership with Precept, a mortgage origination Web site. The rating agency has agreed to give an independent assessment of loans that are auctioned by the site.
Through this partnership, S&P will be review data on loans and provide cashflow reports that would be available for potential lenders to use.
By participating in the analysis, the rating agency hopes to reduce costs and make mortgage evaluation and origination more efficient, not only in terms of CMBS but also the commercial mortgage-backed market as a whole. The commercial mortgage market currently has a yearly volume of above $1.3 million; 15% of that number is eventually securitized.
This new site hastens the origination process because when the rating agency is presented with a loan at origination, no additional evaluation is necessary when the loan is eventually securitized.
Precept acts as a broker-to-lender that underwrites the financing of mortgage loans and coordinates all third-party evaluations and inspections.
Ordinarily, a commercial mortgage-backed broker would have to submit information to a number of lenders. Each lender, in turn, would have to go through the due diligence process. By using the Web site, a reliable third-party does the underwriting and lenders could rely on the third-party assessment provided by Precept, thus eliminating the need to do the underwriting themselves.