Editing Adverse selection (section)

===Adverse selection with asymmetric information in the mortgage market===

In the acquisition of commercial mortgages between the sellers and borrowers, the adverse selection problem will appear corresponding with the phenomenon of asymmetric information. In case of CMBS, An, Deng & Gabriel (2010) pointed out that, due to the unequal information on the secondary market loans, it reinforce the conduit on lenders about the mortgage quality and information. The investors on mortgage market will effectively consider the effect of adverse selection, which correspondingly lead to a lower price margin on loans and portfolios in the market. To sum up, although the agency problem does not appears in junk loans and bonds, it still add the dissatisfied opinion on investor's behaviours.