In one sentence
The agreement routing property revenues through a controlled account, with waterfalls that pay expenses, debt service, and reserves before the borrower sees cash.
The longer version
Structures range from soft lockboxes, where tenants pay into an account the borrower sweeps, to hard lockboxes with springing control on triggers like DSCR falling below a threshold. The waterfall defines who gets paid in what order.
For servicing teams the agreement is operational reality: account setup at closing, trigger testing from financial reporting, and trap events that change where money flows.
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