Collateralized Mortgage Obligations (CMOs)

A collateralized mortgage obligation (CMO) is a type of mortgage-backed security where different bond classes are issued, each class participating in different components, called tranches, of the net cash flows. Here we look at the underlying collateral and structure of CMOs, prepayment speeds, and different types of CMO tranche. Floaters and Inverse Floaters IOs and POs Complexity