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commercial mortgage backed securities (cmbs) can be classified based on whether or not they are issued or backed by a government agency. cmbs that are not issued or backed by a government agency or more commonly referred to as:

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Final answer:

CMBS not backed by a government agency are known as private-label. They contributed to the financial crisis of 2008 due to mismanagement and improper credit ratings, and regulatory oversight was insufficient at the time.

Step-by-step explanation:

Commercial Mortgage Backed Securities (CMBS) that are not issued or backed by a government agency are commonly referred to as private-label or non-agency CMBS. These financial instruments are created when financial institutions bundle mortgages and sell them to investors. Mortgage-backed securities were at the heart of the financial crisis in 2008, as they carried risks that were severely underestimated. During the securitization process, loans, often including those with higher default risks (subprime mortgages), were pooled into securities and sold to global investors as being comparatively safe, relying on improper credit ratings. It was a widespread belief that as long as the housing market continued its ascent, the securities would remain secure. Regulators and banking institutions saw no reason to intervene at that time, not foreseeing the bubble that was forming.

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