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Topic: Collateralized mortgage obligations

	All about Bonds - Collateralized Mortgage Obligations (CMOs)
		Collateralized Mortgage Obligations or CMO are among Wall Street's latest trendy investments.
		Collateralized Mortgage Obligations or CMO are invented by Wall Street just as the government invented mortgage bonds in the 1960s.
		Collateralized Mortgage Obligations may not be suitable for all investors seeking high yields.
	www.all-about-bonds.info /Collateralized_Mortgage_Obligations_CMOs_.html (272 words)

	Collateralized mortgage obligation - Wikipedia, the free encyclopedia
		A CMO deal can be thought of as having a set of collateral, a set of tranches (also called classes), and a set of rules that dictate how money coming in from the collateral will be distributed to the tranches.
		In most CMO transactions, the total balance of the tranches is equal to the total balance of the collateral, and they remain equal, as each time the balance of the collateral changes (because of the principal payments on the underlying mortgages) the total balance of the tranches is also changed.
		When a mortgage default causes a loss, the balance of one of the B pieces is reduced by the amount of the loss.
	en.wikipedia.org /wiki/Collateralized_mortgage_obligation (1211 words)

	Vanderbilt Capital Advisors
		pledge of the collateral to the trustee is protected against claims in the event of bankruptcy of the parent of the issuer.
		The speed at which the mortgage collateral prepays affects the maturity and average life of all the tranches of a CMO as well as the price/yield relationship.
		Historical experience indicates that mortgages do not prepay according to the CPR model; the PSA model is constructed to reflect the assumption that at first a pool of mortgages will hardly prepay at all, gradually they increase their prepayments, and then, after about 30 months, prepayments level off.
	www.vcallc.com /mailings/additions/introtocmo.htm (2871 words)

	Collaterized Mortgage Obligations (CMOs) (Site not responding. Last check: 2007-10-26)
		Collateralized mortgage obligations (CMOs), a type of mortgage-backed security, are bonds that represent claims to specific cash flows from large pools of home mortgages.
		The streams of principal and interest payments on the mortgages are distributed to the different classes of CMO interests, known as tranches, according to a complicated deal structure.
		CMOs are often highly sensitive to changes in interest rates and any resulting change in the rate at which homeowners sell their properties, refinance, or otherwise pre-pay their loans.
	www.sec.gov /answers/tcmos.htm (140 words)

	Collateralized Mortgage Obligation Definition
		Collateralized mortgage obligations (CMO) are backed by mortgage-backed securities with a fixed maturity.
		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.
	www.investorwords.com /932/Collateralized_Mortgage_Obligation.html (240 words)

	FRBSF: Weekly Letter:Innovations and Recent Developments in Mortgage-Backed (1/5/96)
		Another variation of the collateralized mortgage obligation strips the interest payments of the underlying mortgages to an interest-only class and the principal payments to a principal-only class.
		One reason for the disproportionate decline in collateralized mortgage obligation issuance in 1994 may be to the sizable losses in some of the these securities, most notably principal-only instruments and inverse floaters, due to the reversal of interest rates.
		The well-publicized collapse of several hedge funds that specialized in collateralized mortgage obligations, the problems in a number of trust funds, including the Orange County debacle, as well as the charge against some financial firms that they improperly sold these products to individual investors, were severe blows to this market.
	www.frbsf.org /econrsrch/wklyltr/wl9601.html (1793 words)

	Information (Site not responding. Last check: 2007-10-26)
		Mortgage valuations are highly subjective because of the unpredictable nature of mortgage prepayment rates.
		That is, if mortgage rates move lower, causing mortgage bond prices to move higher, the mortgagor has the right to call the mortgage away from the investor at par.
		CMOs and stripped MBS securitized by small business-related securities rated A or Baa are also type IV securities and are subject to an investment limitation of 25 percent of a bank's capital and surplus.
	www.bondtrac.com /XT/information/education/ResdMort.xml (6768 words)

	Collateralized Mortgage Obligations
		Unlike a mortgage pass-through, in which all investors participate proportionately in the net cash flows from the mortgage collateral, with a CMO, different bond classes are issued, which participate in different components, called tranches, of the net cash flows.
		Collateral for the securitization may represent a pool of mortgages, but it is often a mortgage pass-through.
		CMOs entail the same prepayment risk as mortgage pass-throughs.
	www.riskglossary.com /articles/collateralized_mortgage_obligation.htm (466 words)

	FRB: Supervisory Letter SR 91-2 (FIS) on collateralized mortgage obligations/real estate mortgage investment conduits ...
		In contrast to the typical mortgage pass-through security, which passes principal and interest cash flows through to investors on a pro rata basis, a CMO aggregates the cash flows from the underlying pool of mortgage assets and reallocates them to two or more classes of securities having different maturities, coupon rates, and cash flow characteristics.
		This is achieved by directing all prepayments of principal from the underlying mortgage to the CMO classes with the shortest maturities, thus insulating classes with longer maturities against prepayment risk until the shorter-term classes have been fully paid off.
		Initially, CMOs were structured to contain several classes of securities (or tranches) with differing maturities and coupons, and the scheduled principal payments and any prepayments of principal were paid to the various classes in sequential order.
	www.federalreserve.gov /boarddocs/SRLetters/1991/SR9102.HTM (1335 words)

	REMIC Real Estate Mortgage Investment Conduits - The Mortgage Office
		Collateralized mortgage obligations, or CMOs, were first introduced to the marketplace in the early 1980's.
		CMO is a generic term for a certificate or security backed by a pool of loans.
		The Collateralized Mortgage Obligations module helps minimize the prepayment risk commonly associated with CMOs by carefully matching the amount, interest rate and maturity of the certificates sold with the anticipated aggregate payments of the underlying pool of loans.
	www.appliedbusinesssoftware.com /cmo020.asp (210 words)

	Products - CMO's (Site not responding. Last check: 2007-10-26)
		The CMO market has grown to hundreds of billions of dollars in size since its inception in 1983 and today accounts for an ever increasing and important segment of the overall mortgage market.
		CMO's are multi-class bonds that are collateralized by mortgage backed securities such as Ginnie Maes (Government National Mortgage Association), Fannie Maes (Federal National Mortgage Association), Freddie Macs (Federal Home Loan Mortgage Corporation), or by whole loan mortgages.
		A corporate bond backed by a pool of mortgages in which the principal cash flows of the pool are channeled sequentially into one or more classes, or tranches, of bonds.
	www.netvest.com /products/prod_cmo.html (1085 words)

	Private Client Group: Collateralized Mortgage Obligations (CMOs)
		Collateralized Mortgage Obligations are derivative debt securities that are backed by a portfolio of mortgage loans.
		CMOs were developed to offer a wider range of investment time frames and greater cash flow certainty than was typically available with original mortgage-backed securities.
		CMOs are investments generally regarded with a high degree of safety.
	www.leggmason.com /privateclient/advice_center/detail/collateralized_mortgage_obligations.asp (299 words)

	Collateralized mortgage obligations - CMOs Journal of Accountancy - Find Articles (Site not responding. Last check: 2007-10-26)
		CMOs are created by segregating mortgage collateral (such as Ginnie Maes and mortgage loans) into a pool and selling bonds whose principal and interest will be paid from the colateral payments and reinvestment income.
		The task force decided nonequity CMOs that have the potential for loss of a significant part of the original investment because of changes in (1) interest rates, (2) the prepayment rate or (3) reinvestment earnings are high risk and should be accounted for similarly.
		CMOs that don't have the potential for loss of a significant part of the original investment, such as principal-only certificates, would not be considered high-risk CMOs.
	www.findarticles.com /p/articles/mi_m6280/is_n5_170/ai_9614537 (823 words)

	Collateralized Mortgage Obligations
		Collateralized Mortgage Obligations (CMOs) are one of the most innovative investment vehicles available today, offering regular payments, relative safety, and notable yield advantages over other fixed-income securities of comparable credit quality.
		Although Collateralized Mortgage Obligations were originally designed to meet the investment needs of institutional investors, the individual investor has quickly become one of the most important participants in the CMO market.
		The sale of a CMO generally results in a capital gain or loss which is reflected on Schedule D of the Form 1040 for the year in which the sale occurred.
	www.nafibo.com.bo /titularizacion/archivos/misc04.htm (2108 words)

	[No title]
		Finally, the pledge of the collateral to the trustee is protected against claims in the event of bankruptcy of the parent of the issuer.
		A quick measure of the coupons in the collateral is the weighted average coupon, or WAC, which is defined as the average of all the coupons on the pools in the collateral, weighted by the sizes of the pools.
		Since the mortgage collateral will most certainly have some prepayments, the stated maturity is longer than the investment will actually be outstanding and is therefore not a realistic measure of the maturity of the investment.
	www.vcallc.com /mailings/additions/cmos.doc (2953 words)

	CMO Collateralized Mortgage Obligations - The Mortgage Office
		CMO Collateralized Mortgage Obligations - The Mortgage Office
		The Collateralized Mortgage Obligations servicing module of The Mortgage Office fully automates the tasks associated with the selling, servicing and reporting requirements of certificates collaterally secured by a pool of loans.
		The Collateralized Mortgage Obligations module is fully compatible with Microsoft Windows and its user-interface strictly follows the familiar look-and-feel of Microsoft Office products.
	www.themortgageoffice.com /cmo.asp (137 words)

	What Are CMOs? (Site not responding. Last check: 2007-10-26)
		As the mortgage holders make monthly payments of principal and interest, the pass-through security holder is entitled to a pro rata portion of the payments received.
		Mortgage pass-through securities are typically considered to have an investment horizon of approximately 10-12 years on average, even though the mortgages are typically 30-year loans.
		This was achieved by using pools of mortgage pass-throughs as collateral, which produces monthly cash flow of principal and interest, and then redirecting the cash flow to create short, intermediate and long-term bonds.
	www.lasallecmos.com /default.asp (447 words)

	One of the greatest developments in the debt market in the past 30 years was the development of the mortgage-backed ...
		Mortgage issuer or initial lender is a mortgage lender, usually a bank, thrift or a mortgage banker.
		Mortgage servicer: The main function of the servicer is to collect monthly payments from the mortgage borrowers and pass the cash flow to the mortgage pool or other mortgage purchaser.
		In the case of mortgages it is when the mortgage is first issued.
	www.financialpolicy.org /fpfprimermbs.htm (3592 words)

	AccessNorthGa.com - Your Online Local Newspaper
		CMOs that are issued or have their collateral guaranteed by U.S. government agencies or GSEs represent the most secure CMO structures, but even private-label issuers often enjoy strong credit ratings.
		While Fannie and Freddie obligations are not guaranteed by the government, their issues are regarded as high quality because of their role in supporting U.S. housing policy.
		A CMO’s yield and average life will fluctuate depending on the actual rate at which mortgage holders prepay the mortgages underlying the CMO and changes in current interest rates.
	www.accessnorthga.com /articles/afullstory.asp?ID=95931 (633 words)

	Collateralized Mortgage Obligations (CMOs), Real Estate Mortgage Investment Conduits (REMICs), PAC Bonds, TAC Bonds, ... (Site not responding. Last check: 2007-10-26)
		CMOs are issued as different classes of mortgage pass-through securities with different terms, interest rates, and risks.
		The value of a CMO is derived from the underlying mortgages on which it is based.
		The yield and yield to maturity of a CMO bond is calculated like a regular bond, except that the time to maturity is uncertain and variable.
	thismatter.com /money/Bonds/Collateralized-Mortgage-Obligations.htm (2253 words)

	University Rules
		Total investment in collateralized mortgage obligations is limited to no more than ten per cent of the total investments in the temporary investment pool.
		The underlying collateral should be rated in one of the two highest rating categories assigned by a nationally recognized rating agency for that category of financial instrument.
		If the contract is not collateralized, it should be with an entity that is rated by a nationally recognized rating agency whose rating is in one of the two highest rating categories assigned by such rating agency.
	www.uc.edu /trustees/rules/RuleDetail.asp?ID=51 (1385 words)

	Collateralized loan obligations (Site not responding. Last check: 2007-10-26)
		collateralized bond obligations; collateralized fund obligations; collateralized loan obligations; distressed debt collateralized loan obligations...
		Collateralized loan obligations (CLOs) are also making noise, as investors continue to flee the risky high-yield market for less volatile assets,...
		Credit mitigation by way of synthetic collateralized loan obligations supported by financial guarantee contracts is especially important as it not only...
	www.angelfire.com /droid/rosa76/collateralizedloanobligations.html (611 words)

	DTCC Key Issues: Collateralized Mortgage Obligations (CMOs) (Site not responding. Last check: 2007-10-26)
		The collateralized mortgage obligations (CMO) is a multiclass bond backed by a pool of mortgage pass-throughs or mortgage loans.
		As the payments on the underlying mortgage loans are collected, the CMO issuer, through its paying agent, pays a coupon rate of interest to the bondholders along with all scheduled and unscheduled principal payments generated by the collateral, as loans are
		Examining the Growth of the Collateralized Mortgage Obligation Market (January 2003) — This paper outlines recent trends, examines CMO processing practices and the resultant issues, and provides an update on current and prospective CMO processing initiatives.
	www.dtcc.com /ThoughtLeadership/keyissues/CMOs.htm (292 words)

	Collateralized Debt Obligations (Site not responding. Last check: 2007-10-26)
		Collateralized debt obligations are privately placed securitizations that were created in the late 1980s.
		The CMO structure was established in the 1970s and proved readily adaptable to different collateral types because of its ability to repackage and redistribute risk, thereby achieving equivalent returns through higher-rated securities.
		At their genesis in the late 1980s, the primary CDO collateral types were high-yield bonds and loans.
	accounting.smartpros.com /x20636.xml (1080 words)

	III - Asset-backed Securities
		Home equity loans accounted for 28.2 percent of asset-backed securities outstanding in 2005, up from 24.8 percent in 2004 and 12.8 percent in 1996.
		(1) Securities of federal mortgage pools backing privately issued collateralized mortgage obligations (CMOs).
		In CMOs, mortgage principal and interest payments are separated into different payment streams to create bonds that repay capital over differing periods of time.
	www.iii.org /financial2/securities/assetbacked (179 words)

	CMO Collateralized Mortgage Obligations - The Mortgage Office
		The Collateralized Mortgage Obligations servicing module of The Mortgage Office fully automates the tasks associated with the selling, servicing and reporting requirements of certificates collaterally secured by a pool of loans.
		It works in concert with the Loan Servicing, Trust Accounting and ACH Express modules of The Mortgage Office suite of products allowing delegation of unrelated functions to the appropriate department and providing an affordable in-house software solution.
		The Collateralized Mortgage Obligations module is fully compatible with Microsoft Windows and its user-interface strictly follows the familiar look-and-feel of Microsoft Office products.
	www.abstmo.com /cmo.asp (137 words)

	Investments - Financial Services - Lee College (Site not responding. Last check: 2007-10-26)
		Collateralized mortgage obligations that have a stated final maturity date of greater than 10 years; and
		Collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index.
		Lee College funds may be invested in fully collateralized Certificates of Deposit issued by state or national banks domiciled in the State of Texas or savings and loans domiciled in the State of Texas and guaranteed by the Federal Deposit Insurance Corporation or its successor.
	www.lee.edu /financialservices/investment.asp (1525 words)

	Permissibility of Home Equity Loan Collateralized Mortgage Obligations (Site not responding. Last check: 2007-10-26)
		We understand that the Home Equity Loan Collateralized Mortgage Obligation is not generally insured or guaranteed by one of these organizations.
		This definition provides, among other things, that the mortgage related security represents ownership of one or more notes which are secured by a first lien on real estate.
		We understand that a Home Equity Loan Collateralized Mortgage Obligation does not meet this definition because the notes underlying the security are not secured by a first lien.
	www.ncua.gov /RegulationsOpinionsLaws/opinion_letters/1998/98-0403.html (266 words)

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