Commercial Mortgage-Backed Security (CMBS) Loans, its Mechanics, Risks, and Lender Recourse
Not all commercial real estate loans are conventional. Commercial Mortgage-Backed Security loans (CMBS), sometimes referred to as conduit loans, are a category of commercial real estate fixed income loans that are secured by a first position mortgage on a commercial property asset. CMBS loans are typically offered by commercial banks, conduit lenders, or investment banks, and, once they are issued, they are packaged in tranches and sold to investors.