Essay by murtishi001College, UndergraduateA-, November 2011

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With all of the different sites that are becoming popular on the net, people have become more and more aware of these commercial mortgage backed securities. We have become aware of the specific purposes and downfalls of commercial mortgages and even remortgages. They do not differ much from residential mortgage or remortgage. They are in fact very closely related in the mortgage field with some different aspects that follow between each of them. When it comes to commercial mortgages or remortgages, commercial property instead of residential property is used as collateral to secure a loan that is requested. With commercial mortgages we find that the rate of interest is also higher, in case the mortgage holder wants to use his or her commercial property.

The term commercial mortgage backed securities is quite familiar in American security market. They have a related structure to the collateralized mortgage obligation. A CMO is a special purpose entity that is wholly separate from the institution that creates it by being the legal owner of a set of mortgages, which in this case will be commercial mortgages, called a pool.

In recent years, the market has found a steady climb in the prices of commercial properties as well as residential. Noticing this steady climb in the market come a good possibility that real estate prices will continue to step rise in the future, which causes CMBS's to more popularly be adopted by lenders.

In either of these mortgage backed securities, residential or commercial, the person must repay the loan within a specified time period that is applied. A commercial mortgage backed security is a good option to acquire some hard cash in times of dire needs. But besides being used for commercial purposes, a commercial mortgage loan is often used for important business purposes also.