A mortgage security with different "tranches" or maturity classes Such an instrument can fill the predetermined need for maturities by a fund This is one among many new terms in the growing securitization of mortgage lending Such financial activity will greatly facilitate the boom that is taking place in housing due to the dramatic drop in interest rates Securitization will enable pension funds to provide a far higher percentage of lendable funds than traditionally has been the experience
Collateralized Mortgage Obligation A derivative security which is backed by mortgage-backed securities or whole mortgage loans and interest and principal are determined in tranches with shorter maturities and semi-annual payments