What is the primary distinction between mortgage-related securities backed by residential mortgages and those backed by commercial mortgages?

Question

Quizplus · Accepted Answer

The primary distinction between mortgage-related securities backed by residential mortgages and those backed by commercial mortgages is that prepayment is the key risk with residential mortgages, while default is the key risk with commercial mortgages. Interest rate risk is a potential risk for both types of securities, but it is not the primary distinction.

What Is the Primary Distinction Between Mortgage-Related Securities Backed by Residential