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Collateralized Mortgage Obligation

CMO. A mortgage-backed, 

Investment-grade bond

 that separates 

Mortgage

 pools into different 

Maturity

 classes. Collateralized 

Mortgage

 obligations (CMO) are backed by mortgage-backed securities with a fixed maturity. They can eliminate the risks associated with 

Prepayment

 because each security is divided into 

Maturity

 classes that are 

Paid

 off in 

Order

. As a result, they 

Yield

 less than other mortgage-backed securities. The 

Maturity

 classes are called 

Tranche

, and they are differentiated by the 

Type

 of 

Return

. A given tranch may receive interest, 

Principal

, or a 

Combination

 of the two, and may include more complex stipulations. One negative aspect of collateralized 

Mortgage

 obligations is the lower 

Interest

 rates that compensate for the reduction in 

Prepayment

 risk and increased predictability of payments. Also, collateralized 

Mortgage

 obligations can be quite 

Illiquid

, which can increase the cost of buying and selling them.



Related Terms: 41

ACH

,

Buy

,

Call

,

Class

,

CMO

,

Collateralized Mortgage Obligation

,

CTA

,

CLU

,

Collateral

,

Combination

,

ECU

,

Grade

,

Investment-grade bond

,

Interest

,

Inc.

,

Interest rate

,

Illiquid

,

Liquid

,

Low

,

Maturity

,

Mortgage pool

,

Mortgage

,

Obligation

,

Order

,

Owe

,

Pool

,

Paid

,

Prepayment

,

Prepayment risk

,

Principal

,

Quid

,

Return

,

Risk

,

Rent

,

SEC

,

Sell

,

Tranche

,

Type

,

Tip

,

UIT

,

Yield


Other Related Pages:

Category: Bonds


Starting With: C


Semi Related Terms: 980  CLICK HERE TO VIEW

10-Q

,

10-K

,

52-week low

,

Accelerated Cost Recovery System

,

Acquisition cost

,

Allowance for depreciation

,

Average accounting return

,

ACH

,

Adjustable rate

,

Above par

,

Accrual bond

,

Accrual of discount

,

Accrued interest

,

Accumulation bond

,

Agency bond

,

Agency security

,

American Municipal Bond Assurance Corporation

,

Amortization of premium

,

Asset-backed security

,

Assumed bond

,

At par

,

Authority bond

,

Affirmative obligations

,

All or any part

,

Alternative order

,

Associate member

,

At best

,

At call

,

Automated Order Entry System

,

Adjustable rate preferred stock

,

All-risks coverage

,

At risk

,

Annual return

,

Asset class

,

Add-on service

,

Abstract of title

,

Action to quiet title

,

As is

,

Assignment to creditors

,

Attorney in fact

,

Adjustable Rate Mortgage

,

Advance rate

,

After-acquired collateral

,

Annual Percentage Rate

,

Applicable federal rate

,

Assignment of mortgage

,

Assumable mortgage

,

A shares

,

Automatic investment plan

,

At the money

,

Absorption rate

,

Age-weighted plan

,

Across the board

,

Additional paid-in capital

,

Ad valorem

,

Amended return

,

Against the box

,

At the bell

,

At the close

,

At the figure

,

At the full

,

At the market

,

At the opening order

,

Automated Pricing and Reporting System

,

Away from the market

,

Back pay

,

Below the line

,

Books of final entry

,

Books of original entry

,

Burn rate

,

Banking Act of 1933

,

Baby bond

,

Balloon maturity

,

Bearer bond

,

Below par

,

Benchmark interest rate

,

Bid-to-cover ratio

,

Blanket bond

,

Bond anticipation note

,

Bond Buyer

,

Bond circular

,

Bond crowd

,

Bond equivalent yield

,

Bond fund

,

Bond indenture

,

Bond market

,

Bond ordinance

,

Bond quote

,

Bond resolution

,

Bond swap

,

Book-entry security

,

Brady bond

,

Bullet bond

,

Bureau of Public Debt

,

Buy

,

Back office

,

Brought over the wall

,

Buying on margin

,

Buy limit order

,

Buy minus

,

Buy minus order

,

Buy on close

,

Buy on opening

,

Buy order

,

Buy stop order

,

Buy the book

,

Back door

,

Back door financing

,

Balance of payments

,

Bank Rate

,

Base interest rate

,

Board of Governors

,

Buying power

,

Back months

,

Buying basis

,

Buying hedge

,

Breaking the syndicate

,

Bill of exchange

,

Bill of sale

,

Breach of trust

,

By the book

,

Balloon payment

,

Base rate

,

Blended rate

,

Broker loan rate

,

Back-end load

,

Benchmark risk

,

B shares

,

Buy and write

,

Buy-side

,

Back testing

,

Balanced investment strategy

,

Back taxes

,

Break-even tax rate

,

Blow-off top

,

Breadth-of-market theory

,

Beat the gun

,

Buying outright

,

Capital investment

,

Capitalized cost

,

Capitalized interest

,

Cost Accounting

,

Cost Of Goods Sold

,

Cost of sales

,

Credit order

,

Compound interest

,

Cabinet security

,

Call

,

Callable bond

,

Call date

,

Called away

,

Called bond

,

Call price

,

Call protection

,

Call risk

,

Catastrophe bond

,

CAT bond

,

Certificateless municipal bond

,

Certificate of Participation

,

Class

,

CMO

,

Collateralized Bond Obligation

,

Collateralized Mortgage Obligation

,

Collateral trust certificate

,

Collaterized Loan Obligation

,

Combination bond

,

Committee on Uniform Securities Identification Procedures

,

Commodity-backed bond

,

Consolidated bond

,

Convertible security

,

Corporate bond equivalent

,

Coupon bond

,

Coupon rate

,

Coupon yield

,

Credit risk

,

Current coupon bond

,

Current maturity

,

Current production rate

,

Current yield

,

Call money rate

,

Code of procedure

,

Contingency order

,

Contingent order

,

Capitalization of income

,

Capitalization rate

,

Cap rate

,

Civilian unemployment rate

,

Cost of Living Adjustment

,

Cost-of-living index

,

Council of Economic Advisers

,

Cash and carry trade

,

Chasing the market

,

Cheapest to deliver

,

Chicago Board of Trade

,

Commodity pool

,

Cost basis

,

CTA

,

Country risk

,

CLU

,

Combination plans

,

Cost-of-living rider

,

Certificate of stock

,

Cost of carry

,

Certificate of title

,

Class action suit

,

Contract for deed

,

Cancellation of debt

,

Cash collateral

,

Certificate of Claim

,

Chattel mortgage

,

Collateral

,

Collateral note

,

Collateral surety

,

Commercial mortgage

,

Consumer interest

,

Conventional mortgage

,

Cost of debt capital

,

Cost of funds

,

Closed-end investment company

,

C shares

,

Call option

,

Call ratio backspread

,

Call swaption

,

Class of options

,

Close to the money

,

Combination

,

Counterparty risk

,

Covered call

,

Certificate of Occupancy

,

Cloud on title

,

Cash or Deferred Arrangement

,

Combination annuity

,

Class A Shares

,

Class B Shares

,

Crash of 1929

,

Crash of 1987

,

Child and dependent care credit

,

Consolidated tax return

,

Coefficient of determination

,

Cup and handle

,

Cash buying

,

Certificate of delivery

,

Close a position

,

Cornering the market

,

Curbs in

,

Depreciated cost

,

Deposit in transit

,

Date of issue

,

Date of payment

,

Deep-discount bond

,

Deferred interest bond

,

Delivery vs. payment

,

Delivery vs. repayment

,

Digested security

,

Discount bond

,

Discounted bond

,

Dollar bond

,

Drawn securities

,

Droplock security

,

Dual currency bond

,

Day order

,

Designated Order Turnaround

,

Discretionary order

,

Division of Enforcement

,

Division of Investment Management

,

Division of Market Regulation

,

Date of record

,

Dividend in arrears

,

Dividend rate

,

Desk (the)

,

Diminishing return

,

Discount rate

,

Division of labor

,

Derivative security

,

De-escalation clause

,

De facto

,

Doing business as

,

Durable Power of Attorney

,

Date of maturity

,

Debtor in possession

,

Debtor-in-possession financing

,

Deed of Release

,

Deed of Trust

,

Default risk

,

Deferred payment

,

Discharge of bankruptcy

,

Discharge of lien

,

Down payment

,

Due-on-sale clause

,

Dollar cost averaging

,

Deep in the money

,

Deep out of the money

,

Deed of Surrender

,

Department of Housing and Urban Development

,

Deferred payment annuity

,

Distressed security

,

Defensive investment strategy

,

Diversifiable risk

,

Dogs of the Dow

,

Daily low

,

Depth of market

,

Discount yield

,

Downside risk

,

Effective annual interest rate

,

Eurodollar certificate of deposit

,

Exact interest

,

Equity risk premium

,

Escrowed to maturity

,

Eurodollar bond

,

Euroyen bond

,

Event risk

,

Exchangeable security

,

Exempt security

,

Ex-legal

,

Either-or order

,

ECU

,

Exchange rate

,

Effective par

,

Earnings yield

,

Economic growth rate

,

Employer Cost Index

,

Employment Cost Index

,

E-mini

,

Exchange for futures

,

Exchange for physical

,

Exchange of spot

,

Ex-pit transaction

,

Excluded risk

,

Effective tax rate

,

Ex-all

,

Expected return

,

Equity mortgage

,

Explicit interest

,

Ex-warrants

,

Economic rent

,

Employee Retirement Income Security Act of 1974

,

Ex-rights

,

Ex-rights date

,

First In First Out

,

Fixed asset

,

Fixed-charge coverage ratio

,

Fixed cost

,

Form 10-Q

,

Federal Savings and Loan Association

,

Federal Home Loan Mortgage Corporation

,

Federal National Mortgage Association

,

Fidelity bond

,

First call date

,

Fixed income

,

Fixed income equivalent

,

Fixed-income arbitrage

,

Flat yield curve

,

Flight to quality

,

Floating-rate bond

,

Flow of funds

,

Free bond

,

Federal Call

,

Fill or kill

,

Front-ending an order

,

Floating exchange rate

,

Foreign exchange rate

,

Forward exchange rate

,

Forward P/E

,

Factors of production

,

Favorable balance of trade

,

Federal Reserve Discount Rate

,

Foreign direct investment

,

Fee-for-service

,

Fixed annuity

,

Fixed benefits

,

Fixed premium

,

Form 8-K

,

Form S-1

,

Floating security

,

Friends and family offering

,

Financial risk

,

First mortgage

,

Fixed rate

,

Fixed-rate loan

,

Fixed-Rate Mortgage

,

Floating rate

,

Forward interest rate

,

Forward Rate Agreement

,

Full faith and credit

,

Family of funds

,

Fund of funds

,

Free and clear

,

Fixed investment trust

,

Free right of exchange

,

Federal ID Number

,

General Obligation Bond

,

Global bond

,

Gold bond

,

Government Bond

,

Government National Mortgage Association

,

Government securities

,

Government Securities Clearing Corporation

,

Grade

,

Graduated security

,

Guaranteed bond

,

Guaranteed Investment Contract

,

General Securities Representative Examination

,

G-7

,

General Agreement on Tariffs and Trade

,

G-8

,

General mortgage

,

Graduated payment

,

Growing equity mortgage

,

Growth and income fund

,

Gather in the stops

,

Historical cost

,

High-grade bond

,

High yield

,

Housing bond

,

Hart-Scott-Rodino Act of 1976

,

Hit the bid

,

House call

,

House of issue

,

Health Insurance Portability and Accountability Act

,

Holder in due course

,

High-ratio mortgage

,

Home Equity Conversion Mortgage

,

Home equity line of credit

,

Home Mortgage Disclosure Act

,

Historical yield

,

Head and shoulders

,

High-low index

,

Hammering the market

,

Held at the opening

,

Holding the market

,

Investment flows

,

Interest-bearing

,

Income bond

,

Index bond

,

Index-linked bond

,

Industrial revenue bond

,

In escrow

,

Inflation-indexed security

,

Installment bond

,

Insured bond

,

Interchangeable bond

,

Interest rate collar

,

Interest rate risk

,

Interest rate swap

,

International Securities Identification Number

,

Inverted yield curve

,

Investment bill

,

Investment-grade bond

,

Investment letter

,

Investment security

,

Investment value

,

Irredeemable bond

,

In-house

,

Investment Advisor Act of 1940

,

Investment bank

,

Investment banker

,

Investment Bankers Association

,

Investment banking

,

Investment banking group

,

Investment Company Act of 1940

,

Indicated yield

,

In line

,

Inflation rate

,

Investment multiplier

,

Interest rate futures

,

Interbank Rate

,

Insurable interest

,

Insider Trading sanctions Act of 1984

,

Interest

,

Interest expense

,

Internal Rate of Return

,

Indication of interest

,

Inc.

,

In intestacy

,

Inter vivos trust

,

Imputed interest

,

Insured mortgage

,

Interest deduction

,

Interest-only loan

,

Interest rate

,

Interest rate cap

,

Interest rate ceiling

,

Interest rate floor

,

In play

,

In-process research and development

,

Income risk

,

Investment company

,

Investment fund

,

Investment objective

,

Investment policy

,

Investment trust

,

Interest rate option

,

I/O strip

,

Illiquid

,

Inchoate interest

,

Interest-only strip

,

Investment property

,

Immediate payment annuity

,

In-service withdrawal

,

Idiosyncratic risk

,

Investment philosophy

,

Individual tax return

,

Imbalance of orders

,

In and out

,

In sympathy

,

In the tank

,

Junk bond

,

Jointly and severally

,

Jumping the gun

,

Joint and several liability

,

Joint mortgage

,

Joint and survivor annuity

,

Joint return

,

Joint tax return

,

Last In First Out

,

Lender of last resort

,

Law of one price

,

Letter security

,

Limited risk

,

Long Bond

,

Lending at a rate

,

Limit-on-close order

,

Limit order

,

Limit order book

,

Limit order information system

,

Law of demand

,

Law of supply

,

London International Financial Futures and Options Exchange

,

London Inter-Bank Offer Rate

,

Liquid

,

Long-Term Equity Anticipation Securities

,

Letter of comment

,

Legal age

,

Legal risk

,

Line of credit

,

Loan-to-cost

,

Loan-to-value

,

Lock-in

,

Long-term mortgage

,

Load-adjusted return

,

Leading the market

,

Locked in

,

Long-term gain or loss

,

Level I quotes

,

Liquid market

,

Low

,

Money order

,

Maintenance bond

,

Marketable security

,

Maturity

,

Maturity date

,

Maturity gap

,

Maturity value

,

Medium-term bond

,

Minimum yield

,

Minus yield

,

Moral obligation bond

,

Mortgage-backed certificate

,

Mortgage-backed security

,

Mortgage bond

,

Mortgage pass-through security

,

Mortgage pool

,

Municipal bond

,

Municipal bond fund

,

Municipal bond insurance

,

Municipal Bond Insurance Association

,

Municipal investment trust

,

Municipal revenue bond

,

Maintenance call

,

Make a market

,

Margin buying

,

Margin call

,

Margin rate

,

Market if touched order

,

Market on close order

,

Market order

,

Mark-to-market

,

May Day

,

Medium of exchange

,

Marginal propensity to consume

,

Mortgage life insurance

,

Mortgage lien

,

Market rate

,

Minimum payment

,

Money at call

,

Mortgage

,

Mortgage banker

,

Mortgage banking

,

Mortgage broker

,

Mortgage debt

,

Mortgage interest deduction

,

Mortgage note

,

Mortgage rate

,

Mortgage REIT

,

Mortgage risk

,

Mortgage servicing

,

Management buyin

,

Marketable securities

,

Mill rate

,

Mean return

,

Market return

,

Net interest margin

,

Net investment

,

Negotiable certificate of deposit

,

Negotiable Order of Withdrawal

,

Negative yield curve

,

Negotiable security

,

Nine-Bond Rule

,

Nominal rate

,

Non-callable bond

,

Non-interest-bearing note

,

Normal yield curve

,

Notice of Sale

,

National Association of Securities Dealers

,

National Association of Securities Dealers Automated Quotations system

,

National Securities Clearing Corporation

,

National Securities Trade Association

,

No limit order

,

Null and void

,

Negative amortization

,

Negative carry

,

Negative equity

,

Notice of Default

,

Notional principal amount

,

Naked call

,

National Association of Real Estate Investment Trusts

,

Non-investment property

,

Normal retirement age

,

Negative Volume Index

,

Off-balance-sheet financing

,

Off the books

,

One time charge

,

Original cost

,

Other current assets

,

Other long term liabilities

,

Office of Thrift Supervision

,

Ordinary interest

,

Obligation

,

Obligation bond

,

Out-of-favor

,

Over-the-Counter

,

Off-floor order

,

On-floor order

,

On margin

,

Open order

,

Or better

,

Order

,

Order flow

,

Order ticket

,

Other income

,

Operating rate

,

Open interest

,

One-share one-vote rule

,

Opinion of title

,

On account

,

On-the-spot loan

,

Open-end mortgage

,

Open mortgage

,

Original principal balance

,

Overlying mortgage

,

Owe

,

Option pool

,

Out of the money

,

Old age, survivors, and disability insurance

,

On-balance volume

,

Odd lot buy/sell ratio

,

Off-board

,

On close

,

One man picture

,

On open

,

On the opening

,

Order book official

,

Order imbalance

,

Pooling of interests

,

Pre-depreciation profit

,

Pre-tax profit margin

,

Profit and loss statement

,

Par bond

,

Pass-through coupon rate

,

Payment date

,

Payment-in-kind security

,

Performance bond

,

Pickup bond

,

Pool

,

Positive yield curve

,

Premium bond

,

Premium over bond value

,

Prepayment speed

,

Price Value of a Basis Point

,

Prior lien bond

,

Privileged bond

,

Provisional call feature

,

Public bond

,

Public purpose bond

,

Put bond

,

Payment for order flow

,

Public Securities Association

,

Plow back

,

P&L

,

Provision for income taxes

,

Periodic payment plan

,

Pre-existing conditions

,

Private Mortgage Insurance

,

Power of Attorney

,

Package mortgage

,

Paid

,

Paid up

,

Personal interest

,

Pool factor

,

Prepaid interest

,

Prepayment

,

Prepayment penalty

,

Prepayment privilege

,

Prepayment risk

,

Prime rate

,

Principal

,

Principal amount

,

Principal balance

,

Principal risk

,

Prioritization of debt

,

Projected maturity date

,

Purchase-money mortgage

,

Prime rate fund

,

Protective put buying

,

Paid-in capital

,

Paid-in surplus

,

Percent held by institutions

,

Pre-syndicate bid

,

Private Investment in Public Equity

,

Preservation of capital

,

Point-and-figure chart

,

Painting the tape

,

Put/call ratio

,

Quid

,

Quick turn

,

Replacement cost

,

Reports and Records

,

Retention rate

,

Return of capital

,

Return on Capital

,

Return on Invested Capital

,

Return on Total Assets

,

Revolving collateral

,

Risk adjusted return

,

Run rate

,

Real interest rate

,

Regulation Q

,

Rate covenant

,

Real Estate Mortgage Investment Conduit

,

Redeemable bond

,

Registered coupon bond

,

Registered security

,

Remaining maturity

,

Residual security

,

Restricted security

,

Return

,

Revenue bond

,

Risk

,

Reading the tape

,

Receive against payment

,

Receive versus payment

,

Regulation D

,

Regulation G

,

Regulation T

,

Regulation U

,

Round of funding

,

Rules of Fair Practice

,

Rate of exchange

,

Reciprocal of European terms

,

Regulated investment company

,

Real economic growth rate

,

Round turn

,

Reduced paid-up insurance

,

Replacement cost insurance

,

Reinvestment risk

,

Red herring

,

Regulation A

,

Right of first refusal

,

Right of rescission

,

Right to Know

,

Rate-improvement

,

Rate lock

,

Regulation Z

,

Remaining principal balance

,

Renegotiable rate

,

Residential mortgage

,

Reverse-annuity mortgage

,

Reverse mortgage

,

Revolving line of credit

,

Right of recourse

,

Rollover mortgage

,

Rule of 78

,

Ratio calendar combination

,

Registered options principal

,

Rent

,

Rent control

,

Right of redemption

,

Retirement Equity Act of 1984

,

Risk/return trade-off

,

Risk arbitrage

,

Risk-averse

,

Risk management

,

Risk neutral

,

Risk premium

,

Risk seeking

,

Return on Capital Employed

,

Rate of return

,

Real rate of return

,

Risk capital

,

SEC filing

,

Selling, General and Administrative Expenses

,

SG&A

,

Savings and Loan

,

Sight letter of credit

,

Simple interest

,

S&L

,

Stop payment

,

Savings Bond

,

SEC

,

Secured bond

,

Securities and Exchange Commission

,

Self-supporting bond

,

Sell

,

Selling flat

,

Serial bond

,

Series bond

,

Series EE bond

,

Series HH bond

,

Short bond

,

Split coupon bond

,

Spot rate

,

Stamped security

,

Step-up bond

,

Straight bond

,

Super sinker bond

,

Surety bond

,

SEC fee

,

Securities analyst

,

Securities Industry Association

,

Securities Investor Protection Corporation

,

Securities loan

,

Segregation of securities

,

Selling group

,

Sell limit order

,

Sell order

,

Sell plus

,

Sell-side analyst

,

Sell the book

,

Significant order

,

Small Order Execution System

,

Split order

,

Stop-limit order

,

Stop order

,

Savings rate

,

Standard of living

,

Swap rate

,

Systemic risk

,

Selling hedge

,

Second-to-die insurance

,

Separate account

,

Short interest

,

Short interest ratio

,

Statute of Limitations

,

Statutory investment

,

Sale and leaseback

,

Satisfaction of debt

,

Secondary mortgage market

,

Second mortgage

,

Securities lending

,

Security interest

,

Security loan

,

Self-amortizing mortgage

,

Senior security

,

Share appreciation mortgage

,

Single-payment loan

,

Standard payment calculation

,

Start rate

,

Staggered board of directors

,

Systematic investment plan

,

Selling the spread

,

Special use property

,

Savings Incentive Match Plan for Employees

,

SEP Plan

,

Social Security

,

Social Security Tax

,

Security analysis

,

Selling short

,

Selling short against the box

,

Shorting against the box

,

S Corporation

,

Separate tax returns

,

Short-term gain or loss

,

Standard mileage rate

,

Subchapter M

,

Subchapter S Corporation

,

Scale order

,

Schedule C

,

Securities Act of 1933

,

Securities Acts Amendments of 1975

,

Securities Exchange Act of 1934

,

Securities fraud

,

Seek a market

,

S&P phenomenon

,

Stop and reverse

,

Times interest earned

,

Total cost

,

Tax-exempt bond

,

T-Bill

,

Term bond

,

Term to maturity

,

Tranche

,

Treasury Bond

,

Treasury Inflation-Protected Security

,

Trust-preferred security

,

Take a position

,

Time order

,

Two-sided market

,

Two-way market

,

Total return

,

Trailing P/E

,

Total return index

,

Tenancy by the entirety

,

Teaser rate

,

TED spread

,

Truth in Lending

,

Two-step mortgage

,

Tax-free bond fund

,

Type

,

Tenancy at will

,

Top hat plan

,

Transfer payments

,

The Street

,

Timing the market

,

Taxpayer Relief Act of 1997

,

Tax Reform Act of 1986

,

Tax Reform Act of 1993

,

Tax return

,

Take a bath

,

Tip

,

U.S. Government Agency Security

,

U.S. Savings Bond

,

U.S. Treasury

,

U.S. Treasury Bill

,

U.S. Treasury Bond

,

U.S. Treasury Note

,

U.S. Treasury Securities

,

Unlimited risk

,

Unlimited tax bond

,

Uniform Securities Act

,

Unemployment rate

,

Underlying security

,

Unearned interest

,

Uncovered call

,

UIT

,

Unit Investment Trust

,

Unsystematic risk

,

Unit of trade

,

Unit of trading

,

Variable rate

,

With interest

,

Waiver of premium

,

Widow-and-orphan stock

,

W-2 Form

,

W formation

,

When, as, and if issued

,

X or XD

,

Year-To-Date

,

Yankee bond market

,

Yield

,

Yield burning

,

Yield curve

,

Yield elbow

,

Yield spread

,

Yield to call

,

Yield to maturity

,

Yield to worst

,

Y shares

,

Zero-coupon bond

,

Z shares

,

Zero-investment portfolio


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