Mail Stop 3628
March 12, 2021
Anthony Sfarra
President
Wells Fargo Commercial Mortgage Securities, Inc.
c/o Wells Fargo Bank, National Association
9062 Old Annapolis Road
Columbia, MD 21045
Re: BANK 2019-BNK16
Wells Fargo Commercial Mortgage Trust 2017-C38
Wells Fargo Commercial Mortgage Trust 2017-C39
Forms 10-D and ABS-EE for the Monthly Distribution Period Ended
November 18, 2020
Filed December 2, 2020
File Nos. 333-226486-03, 333-206677-16 and 333-206677-17
Dear Mr. Sfarra:
We have reviewed your February 26, 2021 response to our comment letter
and have the
following comments. In some of our comments, we may ask you to provide us with
information
so we may better understand your disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Unless we note otherwise, our references to prior comments are to comments in
our January 29,
2021 letter.
Forms 10-D and ABS-EE of BANK 2019-BNK16, Wells Fargo Commercial Mortgage Trust
2017-C38 and Wells Fargo Commercial Mortgage Trust 2017-C39
1. We have reviewed your responses to prior comments 2, 5 and 7 and it
continues to
remain unclear how the servicers were permitted to advance payments under
the related
transaction agreement. While you contend that payments were still
considered to be due
during the period of the forbearance, we note that the obligor was not
expected to make
Anthony Sfarra
Wells Fargo Commercial Mortgage Securities, Inc.
March 12, 2021
Page 2
principal and interest payments during the forbearance period.
Instead, consistent with
the reporting of loan as current during the period of
forbearance, those payments were
not, in effect, due until after the end of the forbearance period. For
that reason, the
servicer, in continuing to make advances while the loan was in
forbearance, was not in
compliance with Item 1122(d)(2)(iii) of Regulation AB relating to
advances for funds for
these transactions and should identify such material instances of
noncompliance in its
assessment to be filed with your Form 10-K for the previous fiscal
year.
2. We also note your responses to prior comments 1, 3 and 6 indicating
that industry best
practices allow reporting of forbearances within two reporting cycles
and your response
to prior comment 8 noting that the servicer does not believe that
there have been material
instances of noncompliance to report for the previous fiscal year.
Please be advised that
Item 1122 of Regulation AB requires, among other things, that the
servicer assess
whether reports, which includes the filed asset-level data, are
maintained in accordance
with the transaction agreements and applicable Commission
requirements. Item 1122
requirements do not involve an assessment against industry best
practices. In addition, as
we have noted in our comments above, we continue to have concerns that
P&I advances
were not made as specified in the transaction agreements, as required
to be assessed
under Item 1122(d)(2)(iii). Item 1122(d)(2)(iii) does not involve a
consideration of
industry best practices. If the delays in reporting resulted in
material delays in reporting
the forbearance across several transactions in a servicing platform,
we believe that the
servicer should report these delays as material instances of
noncompliance with
applicable servicing criteria in its assessments to be filed with your
Form 10-K for the
previous fiscal year.
Please contact Michelle Stasny at 202-551-3674 or me at 202-551-3850
with any other
questions.
Sincerely,
/s/ Katherine
Hsu
Katherine Hsu
Office Chief
Office of
Structured Finance
cc: Troy Stoddard, Wells Fargo
David Burkholder, Cadwalader, Wickersham & Taft LLP