A SECU RITIZATION structure that repackages pools of MORTGAGE BACKED SECURITIES, WHOLE LOANS, or mortgagebacked STRIPs into TRANCHES with specific RISK and return (YIELD) profiles. CMO structures are available in many different forms, some of them esoteric, risky, and ILLIQUID. However, the largest portion of the market is centered on standard instruments with reasonable RISK and LIQUIDITY parameters. The most common version of the CMO is based on sequential pay tranching, with COUPON payments, and then PRINCIPAL payments, allocated to investors in order of priority. Once all the tranches have been retired in sequence, the remaining ACCRUAL BOND (ZBOND) is paid; since the accrual bond receives no CASH FLOWS until all others have been paid, it protects the cash flow payment stream for the entire structure. See also COMPANION BOND, INTERESTONLY STRIP, PLANNED AMORTIZATION CLASS BOND, PRINCIPAL ONLY STRIP, TARGETED AMORTIZATION CLASS BOND.
What is COLLATERALIZED MORTGAGE OBLIGATION (CMO)?
- COLLATERALIZED BOND OBLIGATION (CBO)
- ARBITRAGE COLLATERALIZED DEBT OBLIGATION
- COLLATERALIZED LOAN OBLIGATION (CLO)
- COLLATERALIZED MORTGAGED OBLIGATION (CMO)
- SYNTHETIC COLLATERALIZED DEBT OBLIGATION (CDO)
- CASH COLLATERALIZED DEBT OBLIGATION
- ACCRUAL BOND
- GENERAL OBLIGATION BOND
- GUARANTEED MORTGAGE CERTIFICATE (GMC)
- MORTGAGE PURCHASE BOND
Featuring Black’s Law Dictionary
Nothing implied or stated on this page should be construed to be legal, tax, or professional advice. The Law Dictionary is not a law firm and this page should not be interpreted as creating an attorney-client or legal adviser relationship. For questions regarding your specific situation, please consult a qualified attorney.
- Suing Your Landlord: How, When, Why, & Should You Bother?
- Drug Decriminalization Laws Setup For Rehaul Throughout US
- Why Trump’s Lawsuit Tactics Won’t Turn The Election
- What Is Impeachment & How Does It Work, Exactly?
- War Drafts – What You Should Know About the Return of the Draft
- Fake News: History, Laws, & Is It Going To Ruin The Election… Again?
- Privacy Laws: Why It Matters, What To Do, & Important FAQs
- Deportation: Human Rights, FAQ, & What To Do
- Flexible Spending Account (FSA): Limits, Expenses & FAQ
- Census 2020: Everything You Need To Know Before You Say No
- Best Way to Find Someone in Jail for Free
- How Do You Look up License Plate Numbers?
- What Is A Police Welfare Check?
- Best Way to Run a Free Arrest Warrant Check
- Signing a Letter on Someone Else’s Behalf
- Best Way to Write a Professional Letter to a Judge
- How To Find A Name & Address Using A License Plate Number
- How To Find An Inmate’s Release Date
- How to Transfer a Car Title When The Owner Is Deceased
- What Rights Do Convicted Felons Lose?