1.   And while prepayment penalties have all but disappeared in residential mortgages, Greenberg said, they are still common in commercial loans, such as co-op underlying mortgages.

2.   Another purchaser of underlying mortgages citywide has been Isaac Rokowsky, principal in Morris Rokowsky Real Estate, based in Borough Park, Brooklyn.

3.   Adding to its exclusivity, and insulating it from the risk of a tenant default, the building has no underlying mortgage.

4.   Across the country, these kinds of mortgage-backed derivatives, based on the value of the underlying mortgage, have already led to widespread financial pain.

5.   But since the co-op building itself is owned by the co-op corporation, the corporation pays real estate taxes and interest on the underlying mortgage on the building.

6.   Expecting redemptions of mortgage-backed securities because the underlying mortgages are being refinanced, managers are buying Treasury securities to fill potential openings in portfolios.

7.   For co-ops, do not forget to make sure that the underlying mortgage has been paid and the building is in sound financial condition.

8.   For the most safety, stay away from funds that make risky gambles with derivatives, generally derived from underlying mortgage securities.

9.   If rates rise, the underlying mortgages will not be refinanced.

10.   The securities registered yesterday will fund the purchase of the underlying mortgages, the filing said.