A type of pay-through unsecured general obligation bond that has several classes. Mortgage cash flow obligations (MCFOs) use cash flow from a pool of mortgages that generate revenue to repay investors their principal plus interest. Payments are received from mortgages in the pool and passed on to holders of the MCFO security.



|||Mortgage cash flow obligations resemble collateralized mortgage obligations (CMOs) in some respects, but they are not the same. MCFOs do not hold a lien on the mortgages held by the security. They are merely obligated by contract to use the income from the mortgages to pay their investors.