For this reason, they will pay higher interest rates than Ginnie Maes. Remember, these agencies are also publicly traded companies, so when you start talking about buying these mortgage backeds, make sure you're not confusing it with their stock. CMOs cover a broad range of mortgage backeds issued by all kinds of companies. They are considered to be higher risk than the other three and, therefore, offer the highest interest rates. These issues are usually sold by class or tranche.
Some pools are interest only.
Some are principal only. Some are tagged to some index. And on and on. They can be quite complicated. The complaint with CMOs has been that the best classes or tranches were reserved for the institutional investors, and the individual investors were left with what they didn't want.