Commercial Mortgage-Backed Securities (CMBS)
A type of mortgage-backed security that is secured by the loan on a commercial property. A CMBS can provide liquidity to real estate investors and to commercial lenders. As with other types of MBS, the increased use of CMBS can be attributable to the rapid rise in real estate prices over the years. Investopedia Says:
Because they are not standardized, there are a lot of details associated CMBS that make them difficult to value. However, when compared to a residential mortgage-backed security (RMBS), a CMBS provides a lower degree of prepayment risk because commercial mortgages are most often set for a fixed term. Related Terms:
Collateralized Mortgage Obligation - CMO
Fannie Mae - Federal National Mortgage Association - FNMA
Ginnie Mae - Government National Mortgage Association - GNMA
Mortgage
Mortgage-Backed Securities - MBS
Pass-Through Security
Real Estate Investment Trust - REIT
Temporary Lender
Vintage
Weighted Average Coupon - WAC |