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The first mortgage-backed asset was known as a mortgage pass-through. What are two similar pooled assets now called?

1) Collateralized mortgage obligations (CMOs) and collateralized debt obligations (CDOs)
2) Collateralized mortgage obligations (CMOs) and pooled, unbacked mortgage obligations (PMOs)
3) Mortgage pass-throughs (unbacked pooled mortgages) and collateralized mortgage obligations (CMOs)
4) Collateralized debt obligations (CDOs) and pooled mortgage obligations (PMOs)

User Meggie
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Final answer:

Two pooled assets similar to mortgage pass-through securities are Collateralized Mortgage Obligations (CMOs) and Collateralized Debt Obligations (CDOs), both of which played roles in the 2008-2009 financial crisis.

Step-by-step explanation:

The two pooled assets that are similar to the first mortgage-backed asset, known as a mortgage pass-through, are Collateralized Mortgage Obligations (CMOs) and Collateralized Debt Obligations (CDOs).

CMOs are a type of mortgage-backed security that contains a pool of mortgages bundled together and sold as an investment. CDOs, on the other hand, are a broader category of asset-backed securities that may include mortgage loans as well as other types of debt, such as credit card debt, auto loans, and corporate debt.

Both CMOs and CDOs played significant roles in the housing bubble and the subsequent 2008-2009 financial crisis, as financial institutions bundled these loans and sold them to investors who were attracted by the apparent steady stream of income and the ratings provided by credit agencies, which, in hindsight, were too lenient.

User Ryan Mortier
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