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   Collateralized Mortgage Obligation (CMO)
   















 

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Collateralized Mortgage Obligation (CMO)

A generic term for a security backed by real estate mortgages. CMO payment obligations are covered by interest and/or principal payments from a pool of mortgages. In addition to its generic meaning, the term CMO usually suggests a nongovernmental issuer. Also called Fast-Pay/Slow-Pay Bonds or Serialized Mortgage-Backed Security because they usually have a multitranche structure with interest and principal payments prioritized and segmented. See also Collateralized Bond Obligation (CBO), Interest Only (IO) Obligation, Government National Mortgage Association (GNMA) Pass-through Certificates, Mortgage-Backed Securities, Principal Only (PO) Obligation, Real Estate Mortgage Investment Conduit (REMIC), Z Bond, Stripped Mortgage-Backed Security (SMBS).

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