Series 24: Collateralized Mortgage Obligations (CMOs)

Collateralized Mortgage Obligations (CMOs)

CMOs are highly risky debt instruments backed by a pool of mortgage pass-through securities or mortgage loans. All advertisements, sales literature, and correspondence concerning CMOs:

• • Must include in the name of the offered product the term “collateralized mortgage obligation”
• • May not compare CMOs to any other investment vehicle
• • Must disclose that a government agency backing applies only to the face