26-40 CMOs are typically created from existing GNMA pass-through securities that are held in trust.

Name: 26-40 CMOs are typically created from existing GNMA pass-through securities that are held in trust.
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CMOs are created by dividing existing GNMA pass-through securities into multiple classes or tranches based on different risk exposures, prepayment characteristics, and yield levels. These tranches are then sold to investors as CMOs, which are backed by the underlying mortgage loans.

26-40 CMOs Are Typically Created from Existing GNMA Pass-Through Securities