COLLATERALIZE

collateralize (k<<schwa>>-lat-<<schwa>>r-<<schwa>>l-Iz), vb.1. To serve as collateral for <the purchased property collateralized the loan agreement>.2. To make (a loan) secure with collateral <the creditor insisted that the loan be collateralized>. [Cases: Secured Transactions  1.C.J.S. Secured Transactions §§  3, 7–9,  23,  37.]   —  collateralization (k<< schwa>>-lat-<<schwa>>r-<<schwa>>l-<<schwa>>-zay-sh<<schwa>>n), n. COLLATERALIZED MORTGAGE OBLIGATION collateralized mortgage obligation.Securities. A bond secured by a group of mortgage obligations or pass-through securities and paid according to the payment schedule of its class (or tranche). • CMOs are issued by the Federal Home Loan Mortgage Corporation, and benefit from predictable payments of interest and principal. — Abbr. CMO. See pass-through security under SECURITY; TRANCHE. [Blacks Law 8th]