Morgan Stanley Trust Details Servicing Shifts, RMBS Legal Wins

TL;DR

**This 10-K reveals a complex CMBS trust navigating servicing changes and ongoing RMBS litigation, with key legal wins for Wells Fargo suggesting potential stability for investors.**

AI Summary

Morgan Stanley Capital I Trust 2021-L7, a non-accelerated filer, submitted its 10-K for the fiscal year ended December 31, 2025, focusing on compliance with Regulation AB for its mortgage-backed securities. The trust's mortgage pool includes the One SoHo Square mortgage loan, serviced under the SOHO 2021-SOHO trust, and the Helios Plaza mortgage loan, serviced under the BBCMS 2021-C12 pooling and servicing agreement. Key changes in servicing include K-Star Asset Management LLC replacing Midland Loan Services as special servicer for the One SoHo Square loan on May 15, 2023. Additionally, Computershare Trust Company, National Association, was engaged on November 1, 2021, to perform certificate administrator, custodian, and trustee roles for Wells Fargo Bank, National Association. The filing also details ongoing legal proceedings against Wells Fargo Bank, N.A. and U.S. Bank National Association concerning their roles as RMBS trustees, with Wells Fargo successfully appealing a Commerzbank AG case in October 2024 and settling with IKB in November 2023. The trust reported no significant obligor financial information, enhancement providers, or derivative instruments. All required reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 were filed during the preceding 12 months.

Why It Matters

This 10-K provides crucial transparency into the operational and legal landscape of a significant mortgage-backed securities trust. For investors, understanding the intricate servicing agreements and the ongoing legal challenges faced by key trustees like Wells Fargo and U.S. Bank is vital for assessing potential risks to their investments. The successful appeals and settlements in RMBS litigation for Wells Fargo could set precedents and reduce future liabilities, potentially stabilizing the market for similar securitized products. Employees of these financial institutions may see reduced legal pressure, while customers of the underlying mortgage loans are indirectly affected by the efficiency and stability of the servicing framework. The competitive context shows major banks navigating complex legacy RMBS issues, with outcomes influencing trust in the broader securitization market.

Risk Assessment

Risk Level: medium — The risk level is medium due to the ongoing legal proceedings against key financial institutions like U.S. Bank National Association, which serves as a custodian for the One SoHo Square mortgage loan. While Wells Fargo Bank, N.A. has seen favorable outcomes in some RMBS litigation, including the dismissal of Phoenix Light's appeal in May 2023 and the denial of Commerzbank AG's appeal in October 2024, the 'NCMSLT Action' against U.S. Bank remains pending, creating potential for future liabilities and operational disruptions for a critical servicing function participant.

Analyst Insight

Investors should closely monitor the ongoing legal proceedings against U.S. Bank National Association, particularly the 'NCMSLT Action,' as adverse outcomes could impact the stability of the trust's servicing functions. Given the non-accelerated filer status and the detailed servicing disclosures, a deeper dive into the specific mortgage loan performance, especially for One SoHo Square and Helios Plaza, is warranted to assess underlying asset quality.

Financial Highlights

debt To Equity

0.0

revenue

$0

operating Margin

0%

total Assets

$0

total Debt

$0

net Income

$0

eps

$0

gross Margin

0%

cash Position

$0

revenue Growth

N/A

Key Numbers

• 2025-12-31 — Fiscal Year End Date (The period covered by this 10-K filing.)
• 2026-03-25 — Filing Date (Date the 10-K was filed with the SEC.)
• 2023-05-15 — Special Servicer Change Date (K-Star Asset Management LLC replaced Midland Loan Services for the One SoHo Square loan.)
• 2021-11-01 — Certificate Administrator Change Date (Computershare Trust Company, National Association, assumed roles from Wells Fargo Bank, National Association.)
• 2024-10 — Commerzbank Appeal Denial (The Second Circuit denied Commerzbank AG's appeal against Wells Fargo Bank, N.A.)
• 2023-11 — IKB Settlement Date (Wells Fargo Bank, N.A. settled claims with IKB International and IKB Deutsche Industriebank.)
• 2023-05 — Phoenix Light Appeal Dismissal (Phoenix Light dismissed its appeal against Wells Fargo Bank, N.A., terminating its case.)
• 2018-03-09 — NCMSLT Action Filing Date (Lawsuit filed against U.S. Bank National Association regarding student loan trusts.)
• 5% — Mortgage Pool Threshold (The One SoHo Square mortgage loan constitutes more than 5% but less than 10% of the mortgage pool.)

Key Players & Entities

• Morgan Stanley Capital I Trust 2021-L7 (company) — issuing entity
• Wells Fargo Bank, National Association (company) — former certificate administrator and trustee, defendant in RMBS litigation
• U.S. Bank National Association (company) — custodian for One SoHo Square mortgage loan, defendant in RMBS litigation
• K-Star Asset Management LLC (company) — special servicer for One SoHo Square mortgage loan
• Computershare Trust Company, National Association (company) — current certificate administrator, custodian, and trustee
• Phoenix Light SF Limited (company) — plaintiff in RMBS litigation against Wells Fargo
• Commerzbank AG (company) — plaintiff in RMBS litigation against Wells Fargo
• IKB International (company) — plaintiff in RMBS litigation against Wells Fargo
• Midland Loan Services, a Division of PNC Bank, National Association (company) — former special servicer for One SoHo Square mortgage loan
• SEC (regulator) — regulator of 10-K filings

FAQ

Risk Factors

• Ongoing Trustee Litigation [medium — legal]: Wells Fargo Bank, N.A. and U.S. Bank National Association are involved in ongoing legal proceedings related to their roles as RMBS trustees. Wells Fargo successfully appealed a Commerzbank AG case in October 2024 and settled with IKB in November 2023, indicating potential liabilities and costs associated with these roles.
• Servicer Changes [medium — operational]: K-Star Asset Management LLC replaced Midland Loan Services as the special servicer for the One SoHo Square mortgage loan on May 15, 2023. Additionally, Computershare Trust Company, National Association, assumed certificate administrator, custodian, and trustee roles from Wells Fargo Bank, National Association, on November 1, 2021. These changes can introduce operational risks and require integration efforts.
• Regulation AB Compliance [medium — regulatory]: The filing focuses on compliance with Regulation AB for its mortgage-backed securities. This requires adherence to specific disclosure and reporting standards for asset-backed securities, with potential penalties for non-compliance.

Industry Context

The mortgage-backed securities (MBS) market is highly regulated, with a strong emphasis on transparency and investor protection under frameworks like Regulation AB. Servicer stability and performance are critical, as disruptions can impact loan administration and investor distributions. The market also faces ongoing legal scrutiny regarding the roles and responsibilities of trustees and servicers in past securitizations.

Regulatory Implications

The trust's operations are subject to Regulation AB, requiring detailed disclosures about the mortgage pool and servicers. Ongoing litigation involving major financial institutions in RMBS trustee roles highlights potential legal and financial risks that could indirectly affect market confidence or operational stability.

What Investors Should Do

1. Monitor ongoing litigation involving Wells Fargo Bank, N.A. and U.S. Bank National Association, as adverse outcomes could signal broader risks in the RMBS trustee landscape.
2. Review the specific terms and conditions of the SOHO 2021-SOHO and BBCMS 2021-C12 pooling and servicing agreements, particularly in light of the servicer changes.
3. Assess the concentration risk associated with the One SoHo Square mortgage loan, which represents more than 5% but less than 10% of the mortgage pool.

Key Dates

• 2025-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K filing.
• 2026-03-25: 10-K Filing Date — The date the annual report was submitted to the SEC.
• 2023-05-15: Special Servicer Change (One SoHo Square) — K-Star Asset Management LLC replaced Midland Loan Services, impacting loan administration.
• 2021-11-01: Certificate Administrator/Trustee Change — Computershare Trust Company, National Association, assumed roles from Wells Fargo Bank, National Association.
• 2024-10-01: Commerzbank AG Appeal Denied — Wells Fargo Bank, N.A. won an appeal, reducing potential litigation risk.
• 2023-11-01: IKB Settlement — Wells Fargo Bank, N.A. settled claims, resolving a legal matter.

Glossary

Regulation AB

A U.S. Securities and Exchange Commission regulation that governs the disclosure and reporting requirements for asset-backed securities. (The filing explicitly states its focus on compliance with Regulation AB for its mortgage-backed securities.)

Pooling and Servicing Agreement (PSA)

A contract that governs the relationship between the mortgage loan originator, the servicer, and the trustee for a securitized pool of mortgages. (The trust's mortgage pool is serviced under separate PSAs, such as SOHO 2021-SOHO and BBCMS 2021-C12.)

Special Servicer

A party responsible for managing defaulted or specially serviced mortgage loans, often involving workout or foreclosure strategies. (K-Star Asset Management LLC was appointed as the special servicer for the One SoHo Square loan.)

Certificate Administrator

The entity responsible for administering the trust's certificates, including distributing payments to certificate holders. (Computershare Trust Company, National Association, performs this role for the trust.)

Non-accelerated Filer

A type of filer with the SEC that is not required to comply with certain accelerated filing deadlines and other requirements. (Morgan Stanley Capital I Trust 2021-L7 is identified as a non-accelerated filer.)

Year-Over-Year Comparison

As this is the first 10-K filing for the fiscal year ending December 31, 2025, a direct comparison to the previous year's filing is not possible. However, the filing details significant changes in servicing roles and ongoing legal proceedings that represent key developments since the trust's inception or prior reporting periods.

Filing Documents

• msc21l07_10k-2025.htm (10-K) — 104KB
• msc21l07_31.htm (EX-31) — 14KB
• msc21l07_33-1.htm (EX-33.1) — 357KB
• msc21l07_33-2.htm (EX-33.2) — 1420KB
• msc21l07_33-3.htm (EX-33.3) — 703KB
• msc21l07_33-4.htm (EX-33.4) — 3113KB
• msc21l07_33-5.htm (EX-33.5) — 2773KB
• msc21l07_33-7.htm (EX-33.7) — 597KB
• msc21l07_33-10.htm (EX-33.10) — 142KB
• msc21l07_33-11.htm (EX-33.11) — 177KB
• msc21l07_33-12.htm (EX-33.12) — 137KB
• msc21l07_34-1.htm (EX-34.1) — 14KB
• msc21l07_34-2.htm (EX-34.2) — 11KB
• msc21l07_34-3.htm (EX-34.3) — 14KB
• msc21l07_34-4.htm (EX-34.4) — 11KB
• msc21l07_34-5.htm (EX-34.5) — 10KB
• msc21l07_34-7.htm (EX-34.7) — 7KB
• msc21l07_34-10.htm (EX-34.10) — 8KB
• msc21l07_34-11.htm (EX-34.11) — 9KB
• msc21l07_34-12.htm (EX-34.12) — 7KB
• msc21l07_35-1.htm (EX-35.1) — 1896KB
• msc21l07_35-2.htm (EX-35.2) — 2593KB
• msc21l07_35-3.htm (EX-35.3) — 1558KB
• msc21l07_35-4.htm (EX-35.4) — 1806KB
• msc21l07_35-5.htm (EX-35.5) — 1086KB
• msc21l07_35-9.htm (EX-35.9) — 191KB
• msc21l07_35-10.htm (EX-35.10) — 1289KB
• 0001888524-26-005246.txt ( ) — 20048KB

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 MSC 2021-L7 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"):

, but does not constitute a reporting "servicer" for purposes of Item

Item 1122, but does not constitute a reporting "servicer" for purposes of Item 1123 of Regulation AB, as specified in the Instruction to Item 1123. U.S. Bank National Association is the custodian under the SOHO 2021-SOHO trust and servicing agreement, pursuant to which the One SoHo Square mortgage loan is serviced. Because U.S. Bank National Association is not the MSC 2021-L7 custodian, is not affiliated with any sponsor and services only the One SoHo Square mortgage loan, which constitutes more than 5% but less than 10% of the mortgage pool, U.S. Bank National Association, as SOHO 2021-SOHO custodian, constitutes a reporting "servicing function participant" for purposes of Item 1122 of Regulation AB, as specified in the Instruction 3 to Item 1122, but does not constitute a reporting "servicer" for purposes of Item 1123 of Regulation AB, as specified in the Instruction to Item 1123. In addition, each of the following parties engaged the services of certain servicing function participants and sub-servicers for the reporting period, as set forth below: On November 1, 2021, pursuant to the second amended and restated servicing agreement attached hereto as Exhibit 99.9, Computershare Trust Company, National Association was engaged to perform all or virtually all of Wells Fargo Bank, National Association's roles as certificate administrator, custodian and trustee, as applicable, under the pooling and servicing agreement. PART I Item 1. Business. Omitted. Item 1A. Risk Factors. Omitted. Item 1B. Unresolved Staff Comments. None. Item 1C. Cybersecurity. Omitted. Item 2. Properties. Omitted. Item 3. Legal Proceedings. Omitted. Item 4. Mine Safety Disclosures. Omitted. PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Omitted. Item 6. [Reserved] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation

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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