explain the general difference(s) between residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities with respect to...

explain the general difference(s) between residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities with respect to the underlying collateral (physical real estate, not the loans).

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Expert Solution

Commercial mortgage back securities are the fixed income securities that have collateral as commercial properties, not residential properties which are in the case of RMBS.

Commercial properties include - apartments, office, hotels, schools, hospitals, etc which can accommodate multiple families

Residential properties include - single, two or four-family real estate

Commercial mortgage back securities also vary from RBMS by having less pre-payment risk in comparison to RMBS because the terms on CMBS are fixed.

jeff jeffy answered 2 years ago

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