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What are Collaterized Mortgage Obligations collateralized by?

1) GNMA mortgage backed pass-through certificates
2) FNMA mortgage backed pass-through certificates
3) FHLMC mortgage backed pass-through certificates

1 Answer

7 votes

Final answer:

CMOs are collateralized by GNMA, FNMA, and FHLMC mortgage-backed pass-through certificates, which are secured by mortgage loans.

Step-by-step explanation:

Collaterized Mortgage Obligations (CMOs) are collateralized by a variety of mortgage-backed securities. Specifically, they can be collateralized by GNMA (Government National Mortgage Association), FNMA (Federal National Mortgage Association), or FHLMC (Federal Home Loan Mortgage Corporation) mortgage-backed pass-through certificates. These certificates represent interests in mortgage loans that are secured by real property and provide the cash flow for CMO payments.

answered
User Soubhik Mondal
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