This is a kind of complex debt security containing a number of mortgages packaged together or sold as a investment. CMOs obtain cash flow as their borrowers repay mortgages that then act like a collateral for this kind of security. In turn, they distribute interest and principal payments to their investors according to their fixed agreement.
CMO (collateralized mortgage obligation)
This is a kind of complex debt security containing a number of mortgages packaged together or sold as a investment. CMOs obtain cash flow as their borrowers repay mortgages that then act like a collateral for this kind of security. In turn, they distribute interest and principal payments to their investors according to their fixed agreement.
