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Article: From main street to Wall Street. (securitization of commercial mortgages)
- Article from:
- Mortgage Banking
- Article date:
- July 1, 1996
- Author:
CopyrightCOPYRIGHT 1996 Mortgage Bankers Association of America. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The securitization of commercial mortgages has had a slower and more deliberate growth period than the residential MBS market. Although the Wall Street investor (albeit wrongly) views the real estate collateral pooled for a residential MBS as homogeneous and similar in certain respects to corporate bonds, an investor cannot make the same assumptions in the face of the unique and diverse nature of commercial real estate.
The differences between residential and commercial real estate are greater than the similarities and revolve around income property underwriting and appraisal; commercial real estate's lack of standard underwriting or loan documents, as opposed to ...