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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)
.
Glossary
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