stripped mortgage-backed securities

stripped mortgage-backed securities
stripped mortgage-backed securities ( SMBSs)
Mortgage securities that separate principal and interest payments from the underlying mortgage-backed securities. SMBSs can take four forms:
- interest-only strips, called I/O strips;
- principal-only strips, called P/O strips;
- discount strips; and
- premium strips.
I/O and P/O strips are the more common of the four. Today, REMIC CMOs are used far more frequently than SMBSs to create securities with the same cash flow characteristics. American Banker Glossary
————
( SMBS)
securities that redistribute the cash flows from the underlying generic MBS collateral into the principal and interest components of the MBS to enhance their attractiveness to different groups of investors. Bloomberg Financial Dictionary

Financial and business terms. 2012.

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