Government National Mortgage Association has rolled out a Stripped Mortgage-Backed Securities Program (SMBS Program). This stripped product results from the creation of interest- and principal-only carve-outs through a Grantor trust structure, rather than the typical REMIC platform. The trust is said to provide more liquidity to the strips that are created (see ASR, 4/19). Freddie Mac and Fannie Mae also have a similar program.
In a release, Ginnie said that it has structured the SMBS Program to "accommodate suggestions received during the last several months from various industry participants." The firm added that the rationale for the establishment of this program was to better the market execution for Ginnie mortgage-backeds and Ginnie Multiclass Securities programs by providing Ginnie issuers more flexibility and by offering new products to investors in the sector.