Servicing Shake-Up, Legal Wins Mark BANK 2021-BNK38 10-K

TL;DR

**This CMBS trust is a complex web of servicers, but recent legal wins for its sponsors offer a glimmer of stability amidst operational shifts.**

AI Summary

BANK 2021-BNK38, a mortgage pool, filed its 10-K for the fiscal year ended December 31, 2025, primarily detailing changes in servicing participants and legal proceedings affecting its sponsors. The filing indicates no revenue or net income figures as it is a securitization trust. Key business changes include Trimont LLC purchasing Wells Fargo Bank, National Association's commercial mortgage servicing business and replacing it as master, primary, and special servicer effective March 1, 2025. K-Star Asset Management LLC also replaced Midland Loan Services as special servicer for BANK 2021-BNK38 on April 27, 2023. Risks are primarily related to ongoing legal proceedings against sponsors like Wells Fargo Bank, N.A., concerning residential mortgage-backed securities (RMBS) trusts, though several cases, including Phoenix Light's and Commerzbank AG's appeals, have been resolved in favor of Wells Fargo. The strategic outlook focuses on maintaining compliance with Regulation AB and managing the complex network of servicing agreements for its mortgage loans, such as the One North Wacker and Park Avenue Plaza mortgage loans.

Why It Matters

This 10-K provides crucial transparency into the operational structure and legal landscape of a significant mortgage-backed securities trust. For investors, understanding the frequent changes in servicers, such as Trimont LLC replacing Wells Fargo Bank, N.A. and K-Star Asset Management LLC replacing Midland Loan Services, is vital for assessing asset management stability and potential impacts on cash flows. The resolution of major RMBS lawsuits in favor of Wells Fargo Bank, N.A. reduces a significant overhang for a key sponsor, potentially stabilizing investor confidence in the broader CMBS market. This competitive context highlights the ongoing consolidation and specialization within the mortgage servicing industry, affecting how these complex financial products are managed and overseen.

Risk Assessment

Risk Level: medium — The risk level is medium due to the inherent complexity of a securitization trust with multiple servicing participants and the ongoing, albeit resolving, legal challenges faced by key sponsors. While Wells Fargo Bank, N.A. has seen favorable outcomes in cases like Phoenix Light and Commerzbank AG, the mere existence of such lawsuits against a major sponsor indicates potential for future litigation or reputational damage that could indirectly affect the trust's assets.

Analyst Insight

Investors should closely monitor the performance of the newly appointed servicers, Trimont LLC and K-Star Asset Management LLC, to ensure a smooth transition and effective management of the underlying mortgage loans. While legal risks for sponsors appear to be diminishing, continued vigilance on any new or ongoing litigation against key participants is warranted to assess potential indirect impacts on the trust's stability.

Key Players & Entities

• BANK 2021-BNK38 (company) — issuing entity and mortgage pool
• Wells Fargo Bank, National Association (company) — former master servicer, primary servicer, special servicer, and custodian; defendant in RMBS lawsuits
• Trimont LLC (company) — successor master servicer, primary servicer, and special servicer effective March 1, 2025
• K-Star Asset Management LLC (company) — current special servicer for BANK 2021-BNK38 since April 27, 2023
• Midland Loan Services, a Division of PNC Bank, National Association (company) — former special servicer for BANK 2021-BNK38
• CoreLogic Solutions, LLC (company) — servicing function participant engaged by Wells Fargo and Trimont LLC
• Phoenix Light SF Limited (company) — plaintiff in RMBS lawsuit against Wells Fargo Bank, N.A.
• Commerzbank AG (company) — plaintiff in RMBS lawsuit against Wells Fargo Bank, N.A.
• United States District Court for the Southern District of New York (regulator) — court where RMBS lawsuits against Wells Fargo Bank, N.A. were filed
• United States Court of Appeals for the Second Circuit (regulator) — appellate court for RMBS lawsuits against Wells Fargo Bank, N.A.

FAQ

Risk Factors

• Legal Proceedings Against Sponsors [medium — legal]: The trust is indirectly affected by ongoing legal proceedings against its sponsors, such as Wells Fargo Bank, N.A., concerning residential mortgage-backed securities (RMBS) trusts. While several cases, including Phoenix Light's and Commerzbank AG's appeals, have been resolved in favor of Wells Fargo, the existence of such litigation can create uncertainty.

Industry Context

The mortgage-backed securities (MBS) market is characterized by complex servicing agreements and a network of specialized servicers. Regulatory compliance, particularly with Regulation AB, remains a critical aspect for trusts. Changes in servicing participants can introduce operational shifts and require careful management to ensure continuity and investor protection.

Regulatory Implications

The trust must maintain strict compliance with Regulation AB, which governs disclosures for asset-backed securities. Changes in servicing arrangements require adherence to specific criteria outlined in the regulation, impacting reporting and operational standards.

What Investors Should Do

1. Monitor servicer changes and their impact on loan administration.
2. Review legal proceedings involving sponsors for potential indirect impacts.
3. Ensure understanding of specific Pooling and Servicing Agreements (PSAs).

Key Dates

• 2025-03-01: Trimont LLC purchased Wells Fargo Bank, National Association's commercial mortgage servicing business. — Trimont LLC replaced Wells Fargo as master, primary, and special servicer, impacting the operational management of the mortgage pool.
• 2023-04-27: K-Star Asset Management LLC replaced Midland Loan Services as special servicer. — This change in special servicer for BANK 2021-BNK38 could affect the management of distressed or non-performing loans within the pool.

Glossary

Regulation AB

A set of rules issued by the U.S. Securities and Exchange Commission (SEC) that govern the disclosure and reporting requirements for asset-backed securities offerings. (Compliance with Regulation AB is a key focus for the trust, ensuring transparency and proper reporting to investors.)

Pooling and Servicing Agreement (PSA)

A legal contract that outlines the terms and conditions under which mortgage loans are pooled together and serviced for the benefit of investors in a securitized product. (The trust's mortgage loans are serviced under separate PSAs, such as those for One North Wacker and Park Avenue Plaza, dictating the operational framework.)

Servicer

An entity responsible for managing mortgage loans on behalf of investors, including collecting payments, handling delinquencies, and performing other administrative tasks. (Changes in servicers, such as Trimont LLC and K-Star Asset Management LLC, directly impact the administration and performance of the mortgage pool.)

Securitization Trust

A legal entity created to hold assets, such as mortgage loans, and issue securities backed by the cash flows from those assets. (BANK 2021-BNK38 is a securitization trust and therefore does not generate revenue or net income directly; its financial performance is tied to the underlying mortgage pool.)

Year-Over-Year Comparison

This filing does not provide comparative financial data as BANK 2021-BNK38 is a securitization trust without revenue or net income. The focus is on operational changes, specifically the replacement of servicing participants, and the status of legal proceedings affecting sponsors, rather than year-over-year financial performance metrics.

Filing Documents

• bak21b38_10k-2025.htm (10-K) — 148KB
• bak21b38_31.htm (EX-31) — 23KB
• bak21b38_33-1.htm (EX-33.1) — 1420KB
• bak21b38_33-2.htm (EX-33.2) — 3113KB
• bak21b38_33-3.htm (EX-33.3) — 600KB
• bak21b38_33-4.htm (EX-33.4) — 626KB
• bak21b38_33-5.htm (EX-33.5) — 118KB
• bak21b38_33-6.htm (EX-33.6) — 142KB
• bak21b38_33-8.htm (EX-33.8) — 597KB
• bak21b38_33-9.htm (EX-33.9) — 86KB
• bak21b38_33-16.htm (EX-33.16) — 2773KB
• bak21b38_33-20.htm (EX-33.20) — 439KB
• bak21b38_33-24.htm (EX-33.24) — 991KB
• bak21b38_33-25.htm (EX-33.25) — 118KB
• bak21b38_33-26.htm (EX-33.26) — 703KB
• bak21b38_34-1.htm (EX-34.1) — 11KB
• bak21b38_34-2.htm (EX-34.2) — 11KB
• bak21b38_34-3.htm (EX-34.3) — 13KB
• bak21b38_34-4.htm (EX-34.4) — 10KB
• bak21b38_34-5.htm (EX-34.5) — 9KB
• bak21b38_34-6.htm (EX-34.6) — 8KB
• bak21b38_34-8.htm (EX-34.8) — 7KB
• bak21b38_34-9.htm (EX-34.9) — 8KB
• bak21b38_34-16.htm (EX-34.16) — 10KB
• bak21b38_34-20.htm (EX-34.20) — 9KB
• bak21b38_34-24.htm (EX-34.24) — 9KB
• bak21b38_34-25.htm (EX-34.25) — 7KB
• bak21b38_34-26.htm (EX-34.26) — 14KB
• bak21b38_35-1.htm (EX-35.1) — 999KB
• bak21b38_35-2.htm (EX-35.2) — 1289KB
• bak21b38_35-3.htm (EX-35.3) — 2577KB
• bak21b38_35-4.htm (EX-35.4) — 2224KB
• bak21b38_35-5.htm (EX-35.5) — 79KB
• bak21b38_35-6.htm (EX-35.6) — 128KB
• bak21b38_35-15.htm (EX-35.15) — 1558KB
• bak21b38_35-16.htm (EX-35.16) — 1806KB
• 0001888524-26-005025.txt ( ) — 22683KB

financial statements

financial statements. Not applicable. Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to 240.10D-1(b). Not applicable. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ___ No X non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. Not applicable. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Not applicable. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Not applicable. DOCUMENTS INCORPORATED BY REFERENCE List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1)Any annual report to security holders; (2) Any proxy or information statement; and (3)Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). Not applicable. EXPLANATORY NOTES The BANK 2021-BNK38 mortgage pool includes the following mortgage loans, each of which is serviced pursuant to a separate pooling and servicing agreement (each, an "Outside Pooling and Servicing Agreement"

Financial Statements and

Financial Statements and Supplementary Data. Omitted. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. Omitted. Item 9A.

Controls and Procedures

Controls and Procedures. Omitted. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. PART III Item 10. Directors, Executive Officers and Corporate Governance. Omitted. Item 11.

Executive Compensation

Executive Compensation. Omitted. Item 12.

Security Ownership of

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Omitted. Item 13. Certain Relationships and Related Transactions, and Director Independence. Omitted. Item 14. Principal Accountant Fees and Services. Omitted. ADDITIONAL DISCLOSURE ITEMS FOR REGULATION AB Item 1112(b) of Regulation AB, Significant Obligor Financial Information. Not applicable. Item 1114(b)(2) of Regulation AB, Significant Enhancement Provider Financial Information. No entity or group of affiliated entities provides any enhancement or other support for the certificates as described under Item 1114 (a) of Regulation AB. Item 1115(b) of Regulation AB, Certain Derivatives Instruments (Financial Information). No entity or group of affiliated entities provides any derivative instruments for the certificates as described under Item 1115 of Regulation AB. Item 1117 of Regulation AB, Legal Proceedings. The registrant knows of no legal proceeding pending against the sponsors, depositor, trustee, issuing entity, servicer contemplated by Item 1108(a)(3) of Regulation AB, originator contemplated by Item 1110(b) of Regulation AB, or other party contemplated by Item 1100(d)(1) of Regulation AB, or of which any property of the foregoing is the subject, that is material to security holders, other than as follows: In December 2014, Phoenix Light SF Limited (Phoenix Light) and certain related entities filed a complaint in the United States District Court for the Southern District of New York alleging claims against Wells Fargo Bank, N.A., in its capacity as trustee for a number of residential mortgage-backed securities (RMBS) trusts. Complaints raising similar allegations have been filed by Commerzbank AG in the Southern District of New York, IKB International and IKB Deutsche Industriebank (together, IKB) in New York state court, and Park Royal I LLC and Park Royal II LLC in New York state court. In each case, the plaintiffs allege that W

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