Second, explain the general difference(s) between RMBS and CMBS with respect to the "typical" loan terms (length/type of contract, any restrictions on prepayment, etc.) and why the loan terms matter to investors interested in purchasing the highest-rated senior bond in each type of pool. Recall that principal and interest is distributed from the "top-down" for CMBS as well as for residential CMO pools. As a result, the cash flows for the highest-rated senior bond in a CMBS pool and a residential CMO pool are similar even though the underlying collateral and loan terms are dissimilar.