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Simple English definitions for legal terms
CMO
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A quick definition of CMO:
Term: CMO
Definition: CMO stands for Collateralized Mortgage Obligation. It is a type of investment that is made up of a bunch of different mortgages. When people buy homes, they take out mortgages to pay for them. Banks then sell these mortgages to investors, who group them together to create a CMO. When you invest in a CMO, you are essentially investing in a bunch of different mortgages at once.
A more thorough explanation:
Definition: CMO is an abbreviation that can stand for two different things:
- Case-Management Order: This is a legal term that refers to a court order that outlines the steps and deadlines for managing a case. For example, a judge might issue a CMO in a divorce case that sets deadlines for submitting financial documents and scheduling mediation sessions.
- Collateralized Mortgage Obligation: This is a financial term that refers to a type of investment that is backed by a pool of mortgages. Investors buy shares in the CMO, which entitle them to a portion of the interest and principal payments made by the homeowners whose mortgages are in the pool.
Examples:
- Example 1: The judge issued a CMO in the personal injury case, which required the parties to exchange evidence by a certain date and attend a settlement conference within 60 days.
- Example 2: The investment firm recommended that their clients invest in a CMO that was backed by a pool of high-quality mortgages.
The examples illustrate the two different meanings of CMO. In the first example, CMO refers to a legal document that sets out the steps and deadlines for managing a case. In the second example, CMO refers to a type of investment that is backed by a pool of mortgages.