Western Asset Mortgage Fund (NYSE: DMO) reclassified as diversified

Rhea-AI Filing Summary

Western Asset Mortgage Opportunity Fund Inc. has reclassified itself as a diversified closed-end fund under the Investment Company Act of 1940. The supplement updates the prospectus and SAI to reflect that, for 75% of total assets, no more than 5% may be invested in any one issuer or more than 10% of an issuer’s voting securities may be owned, excluding cash, U.S. government securities and other investment companies.

The fund removes prior "Non-Diversification Risk" disclosures and clarifies that it is intended as a long-term investment, not a trading vehicle, and that diversification does not assure against market loss. The fund may not resume operating in a non-diversified manner without first obtaining shareholder approval.

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Filed pursuant to Rule 424(b)(3)

Registration No. 333-279051

WESTERN ASSET MORTGAGE OPPORTUNITY FUND INC.

SUPPLEMENT DATED FEBRUARY 13, 2026 TO THE PROSPECTUS AND

STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 28, 2024

Effective as of the date of this supplement, the following supplements and, to the extent inconsistent with, supersedes such information in the Fund’s Prospectus and Statement of Additional Information (“SAI”):

Prospectus

The first paragraph on the cover page of the Prospectus is removed entirely and replaced as follows:

The Fund. Western Asset Mortgage Opportunity Fund Inc. (the “Fund”) is a diversified, closed-end management investment company incorporated under the laws of the State of Maryland. The Fund was previously classified as a non-diversified management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). As a result of ongoing operations, the Fund is now classified as a diversified management investment company. This means that with respect to 75% of the Fund’s total assets, no more than 5% of the Fund’s total assets may be invested in any one issuer or own more than 10% of the outstanding voting securities of such issuer (except, in each case, excepting cash and cash items, U.S. government securities, and securities of other investment companies). The Fund may not resume operating in a non-diversified manner without first obtaining shareholder approval in accordance with the 1940 Act.

The second paragraph titled “The Fund” on page 1 of the Prospectus under “Prospectus Summary” is removed entirely and replaced as follows:

The Fund Western Asset Mortgage Opportunity Fund Inc., a Maryland corporation (the “Fund”), is a diversified, closed-end management investment company. The Fund was previously classified as a non-diversified management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). As a result of ongoing operations, the Fund is now classified as a diversified management investment company. This means that with respect to 75% of the Fund’s total assets, no more than 5% of the Fund’s total assets may be invested in any one issuer or own more than 10% of the outstanding voting securities of such issuer (except, in each case, excepting cash and cash items, U.S. government securities, and securities of other investment companies). The Fund may not resume operating in a non-diversified manner without first obtaining shareholder approval in accordance with the 1940 Act.

The paragraph titled “ “Non-Diversification Risk”. on page 18 of the Prospectus under “Prospectus Summary” is deleted in its entirety.

The section titled “The Fund” on page 30 of the Prospectus is removed entirely and replaced as follows:

THE FUND

The Fund is a diversified, closed-end management investment company registered under the 1940 Act. The Fund was previously classified as a non-diversified management investment company under 1940 Act. As a result of ongoing operations, the Fund is now classified as a diversified management investment company. This means that with respect to 75% of the Fund’s total assets, no more than 5% of the Fund’s total assets may be invested in any one issuer or own more than 10% of the outstanding voting securities of such issuer (except, in each case, excepting cash and cash items, U.S. government securities, and securities of other investment companies). The Fund was incorporated as a Maryland corporation on December 11, 2009, pursuant to the Charter. The Fund’s principal executive office is located at One Madison Avenue, 17th Floor, New York, New York 10010, and its telephone number is (888) 777-0102.

The first paragraph under “Risks” on page 50 of the Prospectus is removed entirely and replaced as follows:

RISKS

The Fund is a diversified, closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. In accordance with the requirements of the 1940 Act, the Fund reclassified its diversification status from non-diversified to diversified. Diversification does not assure against market loss. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objectives. The Fund’s performance and the value of its investments will vary in response to changes in interest rates, inflation, the financial condition of a security’s issuer, ratings on a security and other market factors. Your securities at any point in time may be worth less than you invested, even after taking into account the reinvestment of Fund dividends and distributions. Below are the principal risks associated with an investment in the Fund.

The paragraph titled “Non-Diversification Risk.” on page 78 of the Prospectus under the section titled “Risks” is deleted in its entirety.

SAI

The first paragraph on the cover page of the SAI is removed and replaced as follows:

Western Asset Mortgage Opportunity Fund Inc. (the “Fund”) is a diversified, closed-end management investment company. The Fund was previously classified as a non-diversified management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). As a result of ongoing operations, the Fund is now classified as a diversified management investment company. This means that with respect to 75% of the Fund’s total assets, no more than 5% of the Fund’s total assets may be invested in any one issuer or own more than 10% of the outstanding voting securities of such issuer (except, in each case, excepting cash and cash items, U.S. government securities, and securities of other investment companies). The Fund may not resume operating in a non-diversified manner without first obtaining shareholder approval in accordance with the 1940 Act.

FAQ

What diversification change did Western Asset Mortgage Opportunity Fund (DMO) disclose?

Western Asset Mortgage Opportunity Fund reclassified itself as a diversified closed-end management investment company under the 1940 Act. The change is reflected in its prospectus and SAI and replaces prior non-diversified classifications and related "Non-Diversification Risk" disclosures across multiple sections.

What issuer concentration limits now apply to DMO under its diversified status?

For 75% of the fund’s total assets, no more than 5% may be invested in any one issuer and the fund may not own more than 10% of an issuer’s outstanding voting securities, excluding cash and cash items, U.S. government securities and securities of other investment companies.

Can Western Asset Mortgage Opportunity Fund (DMO) return to non-diversified status?

The fund may not resume operating in a non-diversified manner without first obtaining shareholder approval in accordance with the 1940 Act. This requirement is explicitly stated, meaning any move back to non-diversified status would need a formal shareholder vote and authorization.

How does the updated filing describe investment risks for DMO after diversification?

The fund remains a long-term investment vehicle and not a trading vehicle, and diversification does not assure against market loss. The filing emphasizes that performance and value may vary with interest rates, inflation, issuer financial condition, ratings and market factors, and objectives are not guaranteed.

When did DMO’s diversified status become effective according to the supplement?

The supplement is effective as of its date, February 13, 2026, and states that the fund reclassified its diversification status from non-diversified to diversified in accordance with 1940 Act requirements. The updated language applies to both the prospectus and the statement of additional information.

What key prospectus and SAI sections were changed for DMO?

The cover pages of the prospectus and SAI, the "The Fund" sections, and specified "Risks" sections were revised. References to non-diversified status and "Non-Diversification Risk" were removed or replaced with descriptions of diversified status and the new issuer concentration limits.