Question
What property-level factor must CMBS investors analyze that is especially important for commercial collateral?
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Answer
The property's income-generating capacity.
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Question
Why can MBS-like securities show negative convexity at low yield levels?
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Answer
Falling yields trigger prepayments, limiting price appreciation.
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Question
Why is prepayment risk a high-frequency exam concept in securitization?
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Answer
Because changing prepayments alter cash flow timing and tranche risk.
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Question
How does a mortgage pass-through allocate cash flows and prepayment risk among investors?
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Answer
Principal and interest pass through pro rata; all investors share the same prepayment risk.
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